FashionValet: Five years of losses before Khazanah, PNB investments?

SHAH ALAM – Fashion Valet Sdn Bhd’s (FashionValet) financial challenges have come under scrutiny as the company reportedly incurred losses for five consecutive years prior to investment backing from Khazanah Nasional Bhd and Permodalan Nasional Bhd (PNB).

Online portal New Straits Times reported that FashionValet's financial records between 2012 and 2017 revealed its losses rose from RM166,793 in 2012 to RM10.7 million in 2017.

The national sovereign fund Khazanah and state investment arm PNB invested in the company in 2018.

That same year, the company’s losses ballooned further to RM20.19 million.

According to filings with the Companies Commission of Malaysia (SSM), FashionValet’s current liabilities in 2012 exceeded its current assets by RM401,248.

However, this improved to a net asset position of RM1.24 million by 2017.

During the 2015-2017 period, the company's total assets surged by nearly 300 per cent to RM14.7 million, while total liabilities also increased significantly, reaching RM11.7 million.

In 2018, Khazanah invested RM27 million, securing a nine per cent stake in the company, while PNB contributed RM20 million.

In an earlier statement, Khazanah described FashionValet as a promising local e-commerce platform at the time of investment, with over 400 brands and 15,000 products, and projected annual revenue growth of 60 per cent.

The fund highlighted the rationale behind its investment as part of its commitment to support Malaysian entrepreneurs and the transition from offline to online retail.

The Finance Ministry (MoF), in a statement published on the Malaysian parliament's website, stated that PNB's investment was intended to back a fast-growing Bumiputera-owned digital retail company with the potential to become a regional retail platform.

Recently, Khazanah and PNB divested their interests in FashionValet, selling their stakes to NXBT Partners Sdn Bhd, a move MoF described as a ‘responsible exit’ to a strategic investor capable of addressing FashionValet’s financing needs amid challenging market conditions.

As of Sept 30, NXBT Partners Sdn Bhd is the largest shareholder in FashionValet with a 51 per cent stake.

NXBT Partners is wholly owned by Afzal Abdul Rahim, TIME dotcom Bhd CEO and a senior independent director at CIMB Group Holdings Bhd.

Other significant shareholders of FashionValet are co-founders Datuk Fadzaruddin Shah Anuar (17.7 per cent) and Vivy Sofinas Yusof (17 per cent).

In its last financial filing with SSM, FashionValet reported a net loss of RM34.5 million on revenue of RM112.8 million for the fiscal year ending 31 December 2022.