KUALA LUMPUR — FashionValet founders Datin Vivy Sofinas Yusof and her husband Datuk Fadzaruddin Shah Anuar have admitted responsibility for the failure of their e-commerce platform, following public backlash over the tens of millions in financial losses incurred by state investment bodies Khazanah Nasional Bhd and Permodalan Nasional Bhd (PNB).
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.”
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.
Describing their missteps, Vivy and Fadza explained that their approach to scaling FashionValet was overly aggressive and lacked preparation for unforeseen challenges.
“We attempted to expand the business too aggressively, and did not sufficiently plan for a rainy day,” they said.
Their strategy included heavy investment in technology, rapid hiring, and opening multiple retail locations.
However, these actions left the company financially vulnerable, particularly when the Covid-19 pandemic disrupted business operations.
“As much as we tried to cut costs to conserve cash… the situation had become dire,” they added.
The statement from FashionValet’s founders follows comments from Communications Minister Fahmi Fadzil, who acknowledged the public’s concern and urged patience while Khazanah and FashionValet prepare formal responses.
Fahmi, speaking after attending a Deepavali Madani event yesterday, said “a lot of people have a lot of questions… we need to give the respective parties a little bit of time to come up with formal responses.”
In their post, Fadza and Vivy expressed deep regret for the controversy surrounding the investments, particularly the impact on Khazanah and PNB’s reputations.
“Most of all, we are very sorry for the controversy this has caused Khazanah and PNB… We hope this disappointment does not become a deterrence, and they will continue to support other local entrepreneurs,” they said.
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.
“We think it is time for us to step away from the business and relinquish our positions,” they wrote, adding that they hoped to avoid further harm to the company during its “stages of a turnaround.”
FashionValet, launched as Malaysia’s first local fashion e-commerce site, initially succeeded in connecting Malaysian designers with a broader market.
However, the founders’ admission suggests that rapid expansion, coupled with pandemic-related challenges, left the company unable to sustain itself financially.
The Finance Ministry has clarified that while the loss was significant, it remains “negligible” in comparison to Khazanah and PNB’s overall income. – November 1, 2024