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Singapore’s Big Winner for the Week: F J Benjamin Holdings Ltd

From last Friday to New Year’s Eve, the Singapore market, as represented by the Straits Times Index  (SGX: ^STI), rose 0.3%. However, F J Benjamin Holdings Ltd  (SGX: F10) managed to surge by 11%, thus making it one of the big winners in the local share market this week.

F J Benjamin is involved in brand building and management, and development of retail & distribution networks for international luxury and lifestyle brands across Asia. It owns the famous home-grown brand, Raoul. The brand is actually internationally renowned, so much so that even the Duchess of Cambridge, Kate Middleton, wore a dress from the label in 2012.

More than 20 iconic brands – such as Guess, Givenchy, and Goyard – think of FJ Benjamin as being capable enough to manage them. But despite that, the firm still saw a net loss of S$22 million for the financial year ended 30 June 2014 (FY2014). The poor showing was due to a number of reasons: [S]lowdown in luxury spending in North Asia, protracted deep discounting among Southeast Asia retailers, rising costs in Singapore coupled with a sharp fall in spending by tourists from Indonesia and China”.

The last time the company saw a loss was in FY2009 during the financial crisis which plagued the world.

For the latest quarter ended 30 September 2014, FJ Benjamin saw its revenue decline by 22% year-on-year to S$75.4 million but net profit improved from around S$0.4 million to S$1.1 million. The top-line declined as the “retail industry in the Group’s key markets remained challenging amid declining tourist arrivals and lacklustre consumption”. The profit increase came mainly frm gains in other income of S$8.6 million due largely to the partial divestment of mandatory convertible bonds from an Indonesian joint venture.

Looking ahead, the fashion retailer commented:

“Although sentiment in the near to mid term remains weak, the Group expects its productivity to improve with the planned closures and downsizing of some of its stores in Singapore, the rationalization of its North Asian operations and continued focus on cost efficiencies”.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.