Malaysia’s Khazanah to continue supporting start-ups, ‘unexpected factors’ behind FashionValet woes: Minister

According to local media outlet The Star, Mr. Amir told Parliament that venture capital is important in promoting economic growth and facilitating Malaysia’s transition to high-income position through innovation and sustainable development despite its great danger and uncertain future.

” Khazanah’s funding in FashionValet was made seven years ago and since then, there has been an reform in Khazanah’s investment strategy and the process of choosing purchases has also been tightened, including start-ups and walk capital”, he said. &nbsp,

FACTORS THAT NEGATIVELY IMPACTED FASHIONVALET&nbsp,

Having said that, Mr. Amir brought up a number of “unexpected” elements in order to raise money, including the COVID-19 pandemic impact and cash flow problems. &nbsp,

The crisis had ultimately resulted in the closing of FashionValet’s real shops and a substantial decline in demand for its superior clothes. &nbsp,

According to Mr. Amir,” the Movement Control Order (MCO ) during COVID-19 significantly hampered these operations and decreased the demand for premium products,” referring to the number of national quarantine measures put in place by the then-Malaysian government in response to the pandemic. &nbsp,

A change in e-commerce trends, especially the rise of local clothing brands in the reasonable fashion industry, was the next factor Mr. Amir highlighted. These companies have tapped separate e-commerce and visible Facebook platforms, putting them in direct competition for FashionValet, which was founded in 2010 as an e-commerce platform for independent fashion labels to expand their reach. &nbsp,

According to news outlet Berita Harian, he was quoted as saying,” The shift forced FashionValet to shut down its platform and instead focused on its own brands, dUCK and LILIT.” &nbsp,

Finally, Mr. Amir claimed that FashionValet’s struggled with money flow boundaries was another issue. Despite the company’s desire for new funding, existing owners, such as Khazanah and PNB, were reluctant to raise their investments because of the dangers involved.

But, Mr. Amir emphasized that both Khazanah and PNB, both of whom were minority shareholders in the company, had taken proactive steps to help FashionValet by providing financial advice and proper guidance. &nbsp,

FashionValet’s attempts to secure new funding were even hampered by the challenging funding setting at the time.

He was quoted by The Star as saying that FashionValet urgently needed funds from new investors to keep its business running and address cash flow issues.” They did not receive numerous offers from new investors,” he was quoted as saying. &nbsp,

The secretary added that both Khazanah and PNB had acknowledged that FashionValet’s results had fallen short of forecasts. However, the government plans to evaluate the management process to improve the administration of government-linked businesses in Malaysia. &nbsp,

According to Mr. Amir,” Khazanah and PNB must be given time to complete their review and the last findings will help increase governance without the concerned GLICs,” in reference to government-linked investment companies.

He added that the government may continue to put a lot of focus on controlling how much money goes to the public.

The FashionValet owners, Ms. Vivy and Fadzaruddin, have apologised for the losses and made their resignations from their respective positions as creative chairman and chief executive officer on November 1. They came under scrutiny for their lavish life despite the loss of the business. &nbsp,

The couple’s claims to the MACC have been recorded by graft-busters for the seventh day, according to Bernama’s regional news agency. &nbsp,

On November 6, MACC freezing several of the child’s personal and business bank accounts, which totaled about RM1.1 million.