Annual Report 2007/2008 Annual Report 2007/2008 TEL Singapore Science Park II, Singapore 117684 10 Science Park Road, #04-01 the Alpha, CO
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Annual Report 2007/2008 Report Annual annual report 2007/2008 annual report 2007/2008 CO. REG. NO. 197301125N 10 Science Park Road, #04-01 The Alpha, Singapore Science Park II, Singapore 117684 www.fjbenjamin.com TEL: +65 6737 0155 FAX: +65 6732 9616 operations directory SINGAPORE HONG KONG F J Benjamin (Singapore) Pte Ltd F J Benjamin (H.K.) Limited F J Benjamin Lifestyle Pte Ltd Island Place Tower F J Benjamin Concepts Pte Ltd Room 2308, 510 King’s Road North Point, 10 Science Park Road, #04-01 The Alpha, Hong Kong Singapore Science Park II, Tel : (852) 2506 2666 Singapore 117684 Fax : (852) 2506 3573 Tel : (65) 6737 0155 Fax : (65) 6735 9072 TAIWAN MALAYSIA F J Benjamin (Taiwan) Ltd F J Benjamin (M) Sdn. Bhd. 5F, No 260 Tun Hwa North Road 105 Taipei, F J Benjamin Lifestyle Sdn. Bhd. Taiwan, Republic of China F J Benjamin Luxury Timepieces Sdn. Bhd. Tel : (886) 2 2719 3880 12th Floor, Menara PanGlobal Fax : (886) 2 2719 5080 No 8 Lorong P Ramlee 50250 Kuala Lumpur, Malaysia AUSTRALIA Tel : (60) 3 2056 6888 F J Benjamin (Aust) Pty Ltd Fax : (60) 3 2031 4405 F J Benjamin Concepts (Aust) Pty Ltd Level 6, 10-14 Waterloo Street THAILAND Surry Hills NSW 2010, Australia F J Benjamin Concepts (Thailand) Limited Tel : (612) 9 211 7443 25th Floor, Unit 2501, Fax : (612) 9 211 6505 The Offices At Central World 999/9 Rama I Road, Patumwan Bangkok 10330, Thailand Tel : (662) 646 1070 Fax : (662) 646 1069 contentscontents 01 2008 I F J BENJAMIN HOLDINGS LTD annual report 2007 report annual HOLDINGS LTD F J BENJAMIN contents 02 Corporate Profile 03 Corporate Directory 05 Executive Chairman’s Review 09 Chief Executive Officer’s Report 12 Group 5-Year Financial Summary 14 Board of Directors & Senior Management 19 Corporate Structure Brands Highlights 21 I Fashion 37 I Luxury Timepieces 43 I Lifestyle Timepieces 51 I Lifestyle Investments 53 Corporate Governance 61 Financial Contents 121 Statistics of Shareholdings 123 Notice of Annual General Meeting 02 corporate profile corporate profile With a rich heritage dating back to 1959, SGX-listed F J Benjamin Holdings Ltd is an industry leader in brand building and management, and in developing retail and distribution networks for international luxury and lifestyle brands across Asia. Headquartered in Singapore and listed on the Singapore Exchange in November 1996, F J Benjamin has offices in 7 cities, represents over 20 iconic brands, operates over 180 retail stores/ shop-in-shops, employs over 2,000 employees and has 4 core businesses: Luxury and Lifestyle Retailing and Distribution: F J Benjamin exclusively retails and/or distributes brands such as Banana Republic, Celine, Gap, Guess?, La Senza, Raoul, and Sheridan across various territories. Its retail footprint includes Southeast Asia and Australia. Timepiece Distribution: F J Benjamin exclusively distributes timepiece brands such as Bell & Ross, Chronotech, Girard-Perregaux, Gc, Guess?, JeanRichard, Marc Ecko, Nautica, Nike, Rado and Victorinox Swiss Army through points-of-sale across Asia. Creative & Licensing: F J Benjamin’s creative & licensing division has, among others, conceptualised and developed house label Raoul and also creates original design and manufacture merchandise (ODM) for Guess? Kids and Raoul. Investing in Lifestyle Concepts: F J Benjamin strategically invests in iconic lifestyle concepts as part of its search for meaningful value creation opportunities for shareholders and customers. In the entertainment segment, F J Benjamin has a significant minority investment in Catalist-listed St. James Holdings Limited. corporate directory 03 2008 I corporate directory DIRECTORS SHARE REGISTRAR F J BENJAMIN HOLDINGS LTD annual report 2007 report annual HOLDINGS LTD F J BENJAMIN Mr Frank Benjamin Boardroom Corporate & Advisory Executive Chairman Services Pte Ltd Mr Keith Tay Ah Kee 3 Church Street #08-01 Non-Executive Deputy Chairman Samsung Hub Singapore 049483 Mr Eli Manasseh (Nash) Benjamin Chief Executive Officer Mr Douglas Jackie Benjamin AUDITORS Executive Director Ernst & Young LLP Ms Karen Chong Mee Keng One Raffles Quay Executive Director North Tower Level 18 Mr Joseph Grimberg Singapore 048583 Independent Director Partner: Mr Tan Seng Choon Mr Reggie Thein (starting financial year ended 2008) Independent Director Ms Wong Ai Fong Independent Director SOLICITORS Mr Timothy Chia Chee Ming WongPartnership LLP Independent Director One George Street #20-01 Singapore 049145 Ms Chew Gek Khim Independent Director PRINCIPAL BANKERS REGISTERED OFFICE Citibank Berhad 10 Science Park Road, DBS Bank Ltd #04-01 The Alpha, HSBC Bank Malaysia Berhad Singapore Science Park II, Malayan Banking Berhad Singapore 117684 Oversea-Chinese Banking Tel : (65) 6737 0155 Corporation Ltd Fax : (65) 6732 9616 Website : www.fjbenjamin.com RHB Bank Berhad Standard Chartered Bank JOINT COMPANY SECRETARIES Ms Karen Chong Mee Keng Mr Dilhan Pillay Sandrasegara 04 Asian economies retain good fundamentals even in the midst of the financial turmoil, which gives us the confidence that there are growth prospects in the region. executive chairman’s review 05 2008 I executive chairman’s review DEAR SHAREHOLDERS, 2007 report annual HOLDINGS LTD F J BENJAMIN The past 12 months have been challenging. When we Operationally, the Group is in a stronger position, began the financial year 2007 / 2008 in July 2007, having had its portfolio of brands bolstered by the the sub-prime financial crisis in the United States was addition of established labels like Gap, Banana Republic just unfolding. Its effects soon reverberated around and Celine. In the last few years the Group had the world, creating extreme turbulence in financial undergone major expansion of our retail footprint into markets, and dampening consumer confidence and new prime iconic shopping malls in Southeast Asia. business investments. More recently, inflationary We now have the scale and competitive advantage that pressures fuelled by record high oil prices threatened benefit both customers and shareholders. to further stymie global economic growth. Our strategy makes us a substantially bigger company Against this backdrop, I am pleased to report that today compared to five years ago. Our sales are three F J Benjamin delivered another creditable operating times higher, our earnings nearly seven times. We performance with record turnover up 33% to $342.4 have gained economies and efficiencies of scale. million and operating profits excluding other income, In the process of expanding our retail presence, we rising 31% to $10.0 million. As a result of a drop of have increased our market share and diversified our $3.7 million in exceptional item and a $6.8 million consumer base, with a view that this could reduce the shortfall in other income, net profit attributable to impact of a downturn in such an eventuality. shareholders declined 31% to $14.8 million. Looking ahead, we expect market conditions to Exceptional item for the previous financial year remain challenging in the near term due to a general ended June 2007 was boosted by the sale of the slowdown in the world economy. However, we remain Group’s headquarter in Singapore, while the decline positive for several reasons. in other income was due mainly to a smaller currency translation gain of $274,000 in FY 2008 compared to First, with most of the regional expansion already $5.0 million in FY 2007. substantially completed, we will focus on extracting greater efficiencies from our enlarged network. Second, Asian economies retain good fundamentals even in the midst of the financial turmoil, which gives us the confidence that there are growth prospects in the region. If we take Singapore as an example, it is undergoing an exciting metamorphosis into a truly globalised city, with the inaugural F1 races in September 2008, and the building of the integrated resorts. These initiatives will fuel higher tourist arrivals and drive retail demand. 06 We remain well-positioned to take advantage of new business or acquisition opportunities that may arise. Third, we are confident of the prospects of our The new financial year will be challenging with house brand Raoul going international. Raoul has the on-going uncertainties in the global financial come a long way in the past six years and now markets, which is likely to dampen the current soft possesses the potential to be propelled into a global consumer sentiment. However, we will continue to brand. This potential is being unlocked, with the execute well, manage our inventory efficiently and be possibility of two new Asian territories in the region vigilant in our cost discipline. I am confident that we coming online in FY 2009. have the strategy, the capabilities and the vision to continue to succeed in the new financial year. We also have our sights set on New York, one of the world’s most important fashion capitals for Raoul. Credit goes to management and all colleagues for Understanding that New York is a highly competitive staying the course during the frenzied building and a very challenging market, we are in the midst phase, and riding out this year’s challenging business of conducting a thorough study of the market with climate with great determination and fortitude. They retail consultants in the United States, with a view executed well, differentiating themselves through of assessing and mitigating the potential risks, and service excellence and retail innovation that has been formulating the best strategy to penetrate this new the hallmark of the F J Benjamin brand. market. With rental prices and cost of business falling in the United States, opportunities will arise and it will I am also indebted to my fellow Board members then be a matter of seizing these opportunities when for their invaluable insights, wisdom and the time is right. counsel, which have served well to steer the Group over the past 13 years. Finally, we are in a good financial position, with a strong balance sheet, improving cash flows Last but not least, the results we have achieved and low gearing.