Monday, April 27, 2009

STI: Tales of a luxury retailer

April 27, 2009

the monday interview with Frank Benjamin

Tales of a luxury retailer

From an impoverished WWII childhood, Frank Benjamin has built up a luxury retailing empire

By michelle tay 


The first thing you notice when you walk into Mr Frank Benjamin's 28th-floor apartment is the panoramic view of Singapore's premier shopping strip, Orchard Road, from the balcony.


It is one befitting the man who founded one of Singapore's oldest retail companies, FJ Benjamin.


Asked if he spends his free time looking out at the malls, planning which one to conquer next, and he flashes a cheeky grin before saying: 'No, I conquered them all before I moved here.'


Considering FJ Benjamin turns 50 this year and has made its fame and fortune by bringing international names such as Lanvin, Gucci, Fendi, Guess?, Gap and Banana Republic to South-east Asia, it seems a fair statement.


At 74, Mr Benjamin has weathered a war, three economic recessions and nearly lost control of his company at one point.


Yet, as you notice the Paul Valere paintings in his living room at Ardmore Park, he tells you about the times when his house had 'hardly any furniture in it' and when a property tycoon once called him 'a crazy guy' for buying an apartment he could scarcely afford.


It was 1965 when Mr Benjamin, then married two years, struggling to turn profits at a six-year-old firm and living in a rented pad, bought a 6,000 sq ft apartment in Watten Estate worth $60,000.


Starting with a $500 deposit, he paid regular instalments as the building went up until he had forked out $15,000.


He recalls: 'One day I visited the site and there was the building's owner, Ng Teng Fong, who said to me: 'You crazy guy. You can't even pay your bills, what do you want to buy a house for? I'll take it back and give you a profit of $3,000'.


'Now, if he was offering me a profit, the value of the property must have gone up. So I told him not to worry, I'd pay him. I went home, asked my wife to get a mortgage as I wasn't earning any income and we got our first home that way.'


He chuckles with self-satisfaction and his wife, Mavis, interjects lovingly: 'You had the vision, Frank.'


But he retorts: 'No, I never had the vision. I took a chance and went with it.'


He seems to attribute much of his success to luck and serendipity.


It was an unlikely friendship, he says, that led him onto the fashion scene selling 'millions of dollars worth' of Australian-branded Amco jeans in 1970.


Before that, he was trading office stationery and photographic equipment, and distributing some fashion brands such as Fritz jewellery and Glomesh handbags.


The story goes that he met the Amco brand representative out of courtesy, without any intention of doing business as he deemed the jeans market too saturated. He drove the agent to the airport after the meeting. It was over a few beers there that they struck up 'a terrific friendship', as well as the deal.


He says: 'That became a very, very big business for us, in Singapore, Malaysia and Indonesia. Sales gave us about $100,000 every three months.'


With the profits, he opened Singapore's first luxury boutique for French label Lanvin at the Hyatt Hotel in 1975.


'Rent was $6.50 per sq ft, very high then. Salaries were about $400 to $500 with commission and sales were about $400,000 per month. It was a hugely profitable venture,' he says.


Three years later, he won the rights to distribute Italian luxury label Gucci in the region. It became the group's cash cow until 2000, when the label bought back its businesses from agents worldwide.


He went on to score big names such as Italian luxury label Fendi in 1988, Australian linen line Sheridan in 1990 and American jeans giant Guess? in 1991.


Today, FJ Benjamin also distributes American casualwear chain Gap, French luxury label Celine, and watch brands such as Girard-Perregaux. It also holds a 22.2 per cent stake in megaclub complex St James Power Station.


Last year, the group turned over $342.4 million and made $14.8 million.


Asked when he thought he had 'arrived', Benjamin says with mock dramatic flourish: 'When I paid my first income tax - $13.'


But his humility is genuine, says friend and business partner Dennis Foo.


'Frank is a fair and honourable businessman. His company is all about brands and perceptions of high society, but he's really very down to earth,' says Mr Foo, who co-owns St James with FJ Benjamin, Metro Holdings boss Jopie Ong and the BreadTalk group.


Tumultuous turns


Mr Benjamin insists he 'did not grow up privileged'. His grandparents, born in Iraq of Jewish descent, came to Singapore at the turn of the century. His father's family traded textiles while his mother hailed from generations of opticians.


Born on Dec 29, 1934, Frank Judah Benjamin was the third of six children. His three brothers, Edward, Julian and Nash, and two sisters, Louise and Joyce, are either opticians or retailers today.


Home was in Adis Road until World War II broke out. The family was shipped off by the British government to Mumbai, while his father was interned by the Japanese here for three years.


Then six years old, he recalls he was 'hungry 24 hours a day'. His greatest worry was how to pass Urdu in school.


When the war ended, the family reunited but his father had lost everything. He attended St Andrew's School till he was 18 and had to work to bring money home.


His first job was to grind lenses at FJ Isaacs, his uncle's optometry practice at Collyer Quay. It lasted 11 months as 'the monotony nearly killed' him.


Next was a 2½-year stint as a salesman at Getz Bros, an American company that sold paper, boards and tobacco filters. He rose to become top salesman.


This gave him the confidence to quit. 'I wanted to be my own boss.'


In 1959, he founded FJB 'without any capital' and became a wholesaler. He sold novelties, from straw hats and cutlery to paper and boards, 'to make a few per cent commission to survive'.


He ploughed whatever he made back into the company. His American School teacher wife, whom he married in 1963, was the sole breadwinner during the company's first 10 years.


His wife says: 'I thought it was great that he had a goal. Everything he did was with the family in mind, and how to better ourselves.'


By 1966, he had accumulated $10,000. He set off around the world searching for new agencies, copying their telephone numbers from public advertisements and making cold calls to score deals.


From America, he got lingerie lines. In Japan, he found photographic equipment and paper suppliers. London gave him swimwear, fishnet stockings and Ever -eady packet milk.


He sold Eveready here for $1.25 a pack until Fraser & Neave launched its Magnolia packet milk at 50 cents each, pricing him out.


In 1972, FJ Benjamin made its first million. In 1996, its profit surpassed $10 million and the company debuted on the Singapore Exchange.


But the Asian financial crisis struck shortly after. The company closed shops in Hong Kong, Taiwan, Australia and New Zealand to cut its losses.


Things worsened when Gucci and Fendi bought their businesses back. Calling it the 'biggest nightmare' of his career, Mr Benjamin says: 'Together with the crisis, it cut out all my cash flow. I had devaluating properties, mortgages to pay and no cash. Is that a nightmare or not? It was the perfect storm.'


The company made a loss of $5.9 million in the half year ended Dec 31, 2000. Billionaire investor Peter Lim turned out to be its white knight, pumping in $15 million for 20 per cent of its shares. The company was back in the black in the six months to December 2001, but not before losing $40.91 million in the financial year before that.


Mr Benjamin says: 'After that I vowed that we would never, never put ourselves in that position again. I would always have cash reserves in the bank, just for any eventuality.'


He adds that the group is now 'very stable' and 'well-positioned to ride out this recession', which he believes will last for another two to three years.


Coming full circle


Today, the group's retail and distribution network spans eight territories and 180 retail stores across Asia. His youngest brother Nash, 59, took over as group chief executive in 2006.


As group chairman and executive director, Mr Benjamin is no longer 'operationally hands-on' but he still goes to the office every day to give guidance on corporate direction - and just to keep busy.


He says: 'I can't bear to stay home. And after 50 years, it's become a habit that is difficult to break.'


He does not take kindly to the idea of retirement and is hard-pressed to name hobbies other than travelling. He is however a Manchester United fan - the company opened a themed boutique and cafe for the football club here in 2000 - and a philanthropist, donating to charities in Singapore and Israel, and is a fixture on the local society scene.


Free time on weekends is devoted to family, which includes three grandchildren.


As for how he sees the retailer developing over the next 50 years, he says it must diversify. This involves developing its own brands, which may not necessarily be fashion lines, but 'home wares, electronic wares or other consumer businesses that have synergy with retail'.


He quips: 'In these changing times, you cannot stand still or you will get thrown off the moving bull.'


For now, the company has its first in-house brand, a mid-price men's and women's wear line called Raoul. From a single store in Millenia Walk in 2002, Raoul is now selling in Dubai, London and Paris and plans to break into the northeast American market next.


After chatting for three hours, the sun starts to set, casting a pink glow over the mall horizon. Mr Benjamin offers you tea and asks if there is anything else you need. But you wonder if there is anything he needs instead.


Apparently not.


'The two things that I love in my life are my family and my business, and I'm very happy I have my family in my business and that the two are integrated so well,' he says.


Continuing the legacy


The first family member to join Mr Frank Benjamin at FJ Benjamin was his youngest brother Nash.


Fresh out of high school in the late 1960s, Nash was responsible for sourcing brands for the company and is now, at 59, the group chief executive.


In 1972, Mr Benjamin roped in his wife Mavis to oversee store planning and design - a role she keeps today.


Benjamin's three sons are also involved in the business.


Douglas, 44, is chief executive of FJ Benjamin Singapore. Sam, 37, is group director of timepieces, and Ben, 31, is a regional brand manager.


Douglas' wife Odile, 37, is divisional director of licensing.


Mr Benjamin's daughter Rachael, 30, does not work for the company and is based in New York.


He says he never expected his children to join the business, but it was perhaps his children who had the expectation they would do so after they graduated from university.


He says: 'I didn't encourage them because I thought they should do whatever they wanted to do. But what they wanted was to join the company.


'They must have felt very much a part of all the discussions Nash and I had at home.'


Brushing off suggestions of nepotism at the company, he retorts: 'How many people do you think we have working with us regionally? We have 2,000 employees and only seven family members.


'We have CEOs in Malaysia, Indonesia, Hong Kong and Thailand and senior managers who are not related to us, but make decisions with us.'


He also denies his children have it easy. 'Nobody thinks that working in their father's shop means they can have a free ride.


'They are all more hardworking than the hardest working people in the company. And they're certainly not being paid extra.'


my life so far


'I told them: 'I have no experience at all, but I'm extremely interested to learn. Please give me an opportunity and I'll learn very fast. I'll take exactly the same salary I'm taking now'. Actually it was $150 per month, but I told him $200. So I got $50 more'

On how he got his first sales job at the age of 20. Claiming to have no experience, it was the first display of his business acumen


'Every time they asked me for something, I'd say no, even though I'd give it to them eventually. I remember the company sold Gucci shoes for teens and they wanted them. I said: 'Pfft, definitely not''

On raising his children to not expect things too easily


'Young people now wear three-quarter-length pants. Have you seen those? I hate them. For women, it's nice, it shows a bit of leg. But for men, it's disgusting. My sons wear them and I ask 'What's the matter with you?''

On the casual style that has crept into fashion over the years

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