His Vision is to Become a Global Fashion Company

by Uma Shankari, Apr 24 2009 FJ Benjamin chief is confident the company will emerge from the current crisis relatively unhurt, says Uma Shakari.

In his three years heading leading lifestyle and fashion group FJ Benjamin Holdings, chief executive Nash Benjamin has seen it through both ups and downs.

Two years ago, he spearheaded the company's rapid expansion and built up its corporate profile. And now he is facing the toughest challenge since taking over the helm of the company in May 2006 in the form of an ongoing economic downturn. But Mr Benjamin remains confident that the company will emerge from this crisis relatively unhurt.

The company's retail sales started falling as early as Q4 2007, Mr Benjamin recalls. But he believes that the company is 'dealing with it'. For one, it is looking to manage its costs and cashflow.

FJ Benjamin's business received a new lease of life in 2007, when the retailer embarked on an ambitious expansion plan and started working to boost its corporate profile.

Its retail platform grew by over 50 per cent in the course of one and a half years. In addition to growing its existing portfolio - which included brands such as Guess and Girard-Perregaux - FJ Benjamin also introduced two other well-known brands, Gap and Banana Republic, to Singapore. 'It was timely, the market was booming and it was a very exciting period,' he recalls, when asked for the reason for the quick expansion. And also in 2007, FJ Benjamin took several steps to boost its corporate profile. Mr Benjamin oversaw the conversion of a large chunk of FJ Benjamin warrants into shares, which doubled the company's shares in the market.

The retailer also embarked on an investor relations programme which enhanced the company's corporate profile. For one, the initiative meant that the company started getting coverage from analysts for the first time in its history. While FJ Benjamin started out as a family-owned and run business, Mr Benjamin is very conscious of the fact that the organisation he now manages is a listed company.

Since its founding in 1959 by Mr Benjamin's elder brother Frank, the then-sole proprietorship has today grown to an industry leader representing over 20 iconic brands operating in North and South-east Asia with combined annual sales exceeding $300 million. Although the company has a small market capitalisation, it currently has over 4,000 shareholders and more than 500 million shares in the market. 'We believe that this (maintaining good investor relations) is important because if you are a listed company, you have to always think of your shareholders,' he says, explaining the company's push to boost its investor profile, which has resulted in a slew of awards. Among others, the company bagged the Most Transparent Company Award in the 2008 Investors Choice Awards organised by the Securities Investors' Association of Singapore (SIAS).

In addition to its increased shareholder equity, the company has also improved its financial position since the 1997 Asian financial crisis, which is one of the reasons why Mr Benjamin is certain that it will survive the current recession.

During the 1997 financial crisis, FJ Benjamin was hard hit as the company had very high gearing, and was exposed to the North Asian markets, where the costs of doing business is very high. By contrast, the company's business model has changed a fair bit since. Its gearing has been reduced from about two and a half times during the Asian financial crisis to about 0.3-0.5 times in recent years. The company has also shifted its focus to South-east Asia, where most of its retail presence is. In North Asia, by contrast, FJ Benjamin uses a distribution model to manage costs. And as the market recovers towards the end of this year (as expected by Mr Benjamin as well as many analysts), FJ Benjamin will look for opportunities to acquire more brands and even companies. 'We are well positioned to take advantage of the recovery,' Mr Benjamin says.

An ideal CEO, says Mr Benjamin, must have firm financial and non-financial goals for his company, and come up with a business model that is scaleable.

But in addition to this, he must also be able to communicate these goals as well as his vision for the company clearly to his employees, and empower them to take action to make these goals and vision reality.

So is Mr Benjamin an ideal CEO? 'I believe I practise what I preach,' he says.

FJ Benjamin celebrates its 50th anniversary this year, but Mr Benjamin says that the company will not be resting on its laurels. Instead, the management will use the experience gathered over the years to work towards achieving FJ Benjamin's vision of becoming a global fashion company.