NEW YORK TIMES | ELISE ANNISS
As the fashion industry struggles with a global economic downturn and a rapidly changing consumer landscape, qualities that are at the heart of family and owner/founder businesses, like a consistent vision and a long-term approach, seem to be helping those companies ride out the storm.
Among the mid-range businesses that match this description is FJ Benjamin, a franchise specialist in Singapore. And there are the founders who hope they are nurturing family businesses in the making, like David Reiss, head of the British chain Reiss.
“The advantage of these family-owned businesses is that they are nimble, close to their business and the end consumer, and are able to move quickly compared with some larger companies,” said Robert Burke, president and chief executive of the consultancy Robert Burke Associates in New York, whose clients range from international fashion and retail brands to luxury resorts. “Also, they are not as tempted to over leverage themselves, which has been one of the downsides for some larger businesses in this present crisis.”
His opinion is echoed in the report “In Safe Hands,” which was published in March by Barclays Wealth and the Economist Intelligence Unit. It concludes that family businesses have certain characteristics — they are risk averse, less burdened by debt, and agile because ownership and management are closely aligned — that can stand them in good stead during difficult times.
“I think having the owners being involved is comforting because we own a stake in the business so we will do whatever we can to make it perform as well as possible in the long term,” said Douglas Benjamin, chief executive of FJ Benjamin Singapore.
His father, Frank Benjamin, founded the company in 1959 and still acts as its chairman. His uncle is chief executive of the parent company, FJ Holdings, which is listed on the Singapore stock exchange. With his brothers and other family members, he retains a 28 percent stake in the company, which notched up sales of $200 million for the year ended June 30. “We also take a long-term approach to risk, which is a different way of looking at something compared with someone who is incentivized to act in a short-term way,” Mr. Benjamin said.
The company initially ran the local operations of such major fashion brands as Gucci, Lanvin and Fendi, until those companies got excited about emerging markets and took back control. But retail franchising is still an important component of the business — it operates Celine’s business in Indonesia, Malaysia, Singapore and Thailand, and for three years it has been responsible for GAP and Banana Republic’s 30 stores in Singapore, Malaysia and Indonesian.
Focusing on the long term, Douglas Benjamin said he was going international with the company’s brand, Raoul. The label, which began as a men’s shirt line in 2002, now sells men’s and women’s clothing through a network of Raoul stores in South East Asia and Dubai.
And he is being cautious — the brand will go wholesale first, rather than retail, a route that Mr. Benjamin is more familiar with but is the riskier path.
Raoul opened a New York showroom in July and made its European debut as part of the Vendôme Luxury Trade Show that was showing at Le Meurice through Tuesday as part of Paris Fashion Week.
David Reiss still heads the privately owned chain that bears his name, which is valued at £90 million, or about $143 million. Reiss. Started in 1971, it has grown to 90 stores on both sides of the Atlantic as well as in China and the Middle East.
“When the whole world was crashing in 2008, I decided that 2009 would become a year of consolidation,” Mr. Reiss said. “I took stock of exactly where we sit in the market and re-sowed the seeds for brand evolution.”
Mr. Reiss has hired from the luxury sector — the new brand director is Andy Rogers, who joined Reiss from Stella McCartney, where he was store planning and visual director — and introduced the edgier men’s and women’s 1971 collection for autumn (celebrated at the start of London Fashion Week last month). But Mr. Reiss said that, at its core, company values have not changed.
“1971 is an extension of the Reiss brand and we’ve been careful not to alienate the core customer with it,” he said, explaining that he wanted to complement the existing, dressy collections with a casual sub-brand that also might appeal to a new, younger customer. The collection includes items like a short leather jacket at £195 and jeans with different fits and finishes, ranging from £79 to £89.
“I think that from the perspective of third parties, like employees and suppliers, companies such as these provide secure relationships that are longstanding,” said George Wallace, chief executive of MHE Retail, a strategy firm.
“With these people there’s a sense of ownership that you just can’t recreate with someone on a salary and a bonus,” he said. “They have a drive and commitment that goes beyond doing the job. After all, they won’t jump ship when the going gets tough.”