Chairman's Massage
Dear Shareholders,
I am pleased to report that we have managed to maintain our profitability for the second year since the COVID-19 pandemic changed so much about our world and our way of life. It is thus particularly pleasing to pen my maiden Chairman’s message to you on the back of improved performance overall.
The business recovery started strongly in the second half of last year when countries in the region began to dismantle border restrictions that were put in place to curb the spread of the coronavirus. The upswing in business was strong and palpable during that period corresponding to the first half of our financial year ended 30 June 2023. But as economies start to sputter amid rising interest rates and inflation, the slowdown in consumer spending in recent months became evident.
As central banks continue their fight against inflation by keeping rates up, many economists have already downgraded growth prospects for Southeast Asian economies for 2024, reflecting weaker global demand for manufactured goods.
While we brace ourselves for weaker consumer demand, we are quietly confident that we will be able to navigate through this period and strengthen our position as one of the region’s preeminent lifestyle and luxury retailers.
We will continue to diversify our earnings base to include related businesses, as we did in recent years when we added beauty and wellness to complement our wide range of fashion products. Brands such as Dr. Barbara Sturm and MZ Skin are leaders in their home markets and have the potential to grow strongly in Southeast Asia.
IMAGINING THE FUTURE OF RETAIL
FJB is cognisant of the many changes affecting the retail industry and is taking steps to deal with the challenges and opportunities.
With the rise of e-commerce, brick-and-mortar retailers need to provide unique and immersive experiences along with top quality in-store service to differentiate themselves from online competitors.
We believe in the potential of experiential retail and have recently opened Avenue on 3, a new lifestyle concept store at the Paragon Shopping Centre. The 8,000-square-foot store does just that by showcasing a wide range of footwear from established and up- and-coming brands that customers can try on for comfort and style while sipping artisanal coffee or champagne. Avenue on 3’s large, flexible space also allows us to host special exhibitions and events.
SINGAPORE AS A LIFESTYLE AND RETAIL HUB
In October last year, Singapore unveiled its Retail Industry Transformation Map 2025 to strengthen the island’s position as a global lifestyle and retail hub, anchored with new experiential concepts and innovative products.
The move to attract more global brands and build a core of local Singapore brands will add vibrancy to the local retail scene, benefitting FJB.
BUSINESS OUTLOOK
The euphoria that followed the end of COVID-19 is over and we need to position ourselves for a period of elevated inflation. While these problems are partly cyclical, there are also structural issues and geo-political tensions at play such as the increasingly frosty relations between the US and China.
Nonetheless, there are bright spots for FJB such as the increased interest in health and wellness as well as the revival of tourism in our core markets of Singapore, Malaysia and Indonesia.
Notwithstanding the effects of rising inflation, real disposable income in Southeast Asia will likely rise over the medium term due to the region’s favourable demographics. Indeed, concerns about China have led to a surge in foreign direct investments in Southeast Asia as multinationals diversify their supply chains.
FJB will continue to look for new opportunities without losing sight of our core competency, which is brand management of lifestyle and luxury products.
APPRECIATION
Finally, I would like to thank my fellow directors for their wise counsel, and our staff, customers, shareholders, business partners and associates for keeping faith with us over the years.
In particular, I would like to highlight the contributions of our founder Frank Benjamin, who retired as Non-Executive Chairman on 31 December 2022. Frank is now Emeritus Chairman and Advisor to the Board of Directors.
Frank set up FJB in 1959 and was Executive Chairman and Chief Executive Officer till 2006. He relinquished the Chief Executive Officer position but remained as Executive Chairman till 2016. Under his leadership, FJB pioneered the standalone single-store concept for high fashion brands in Singapore – being the first to set up a fashion boutique, for Lanvin in 1975. He also led the Group’s expansion in the region, enlivening the regional retail scene.
Frank received the Singapore Tourism Board’s Tourism Entrepreneur of the Year in 1996 in recognition of his contributions to the retail and tourism sectors.
I wish Frank a happy retirement.
ELI MANASSEH (NASH) BENJAMIN
Executive Chairman
F J Benjamin Holdings Ltd.
