KUALA LUMPUR – Challenges while expanding the platform during the Covid-19 pandemic forced FashionValet to shift its focus from operating as an e-commerce platform for Asean products to promoting its in-house brands dUCk and Lilit instead, sovereign wealth fund Khazanah Nasional Berhad said.
Although Khazanah made no mention of the owner, dUCk and Lilit are fashion brands founded by social media personality Datin Vivy Sofinas Yusof.
In a statement, Khazanah explained that they acquired a 9% stake in FashionValet in 2018 for RM27 million, among other things, as a commitment to support Malaysian entrepreneurs and promising early-stage companies.
However, Khazanah said that FashionValet’s focus on Vivy’s brands, dUCk and Lilit, was the company’s attempts to preserve operating margins and cash flow.
“The company also took measures to rationalise costs and streamline operations but continued to face challenges, including to secure capital during the difficult fundraising environment in 2022-2023,” the statement said.
Thus at the end of 2023, because of FashionValet’s urgent need for funds to continue operations, Khazanah accepted the offer by NXBT Partners to inject capital and acquire existing stakes.
“The divestment represented a responsible exit to transfer ownership to a party who
could help guide the company to a new growth trajectory,” Khazanah added.
Fashion Valet was founded by Vivy and her husband Datuk Fadzaruddin Shah Anuar, who today admitted responsibility for the failure of the company.
In an Instagram post earlier today, the two affectionately known as Vivy and Fadza said: “We take full responsibility for the failure of the investment. As the two people who were responsible for managing the company, the buck stops with us — and the fact is that we failed our investors.”
Describing their missteps, Vivy and Fadza explained that their approach to scaling FashionValet was overly aggressive and lacked preparation for unforeseen challenges.
The founders also announced their decision to step down from the company, stating that it was in FashionValet’s best interest to undergo a leadership change amid ongoing efforts to stabilise the business.
The admission comes as Khazanah and PNB face scrutiny over their respective RM27 million and RM20 million investments in FashionValet.
A parliamentary disclosure revealed that both entities sold their combined RM47 million stake for only RM3.1 million, sparking public calls for accountability. – November 1, 2024