Investigate the financial dispute, profits and losses of FashionValet

On August 1st, we reported on the closure of FashionValet and aspects of the company that were being reviewed online.

In particular, we based our research on a Facebook post by Aliff Ahmad, co-founder of, who has been publishing posts on Fashion Valet for some years.

We soon realized there were some numbers that simply didn’t add up, so we bought the publicly available reports of Fashion Valet Sdn Bhd on MyData SSM ourselves to find out the truth.

1. Aliff’s screenshots of RM 4.2 million dividends confirmed what we found

In Aliff’s Facebook post, he mentioned multiple times that the founders of 30 Maple Sdn Bhd (the initial parent company behind dUCk, but more on that later) took RM 4.2 million in dividends.

Along with the written post, he uploaded a screenshot allegedly showing how the company distributed dividends worth RM 4.2 million in 2017.

According to the 30 Maple annual reports we purchased, the reported figures confirmed Aliff’s claims.

Another thing that Aliff posted that we also found evidence of was the cancellation of the RM 2.283 million web development in FashionValet’s 2017 annual report.

Aliff’s screenshot on the left, our results on the right

Publisher’s Update: We updated this point and his following argument to be actually accurate, as we had mistakenly pointed out that Aliff’s claim on dividends of RM 4.2 million was not in line with our findings. However, he was referring to 30 documents from Maple, and not those from FashionValet, to which we had originally compared his claims.

2. Multiple mistakes were made in FashionValet’s 2017 annual report

Interestingly, however, if we were to look at the 2018 annual report, it states that the 2017 numbers have been “reframed”. A restatement refers to a review of a company’s previous financial statements to correct an error.

Some of the restated information appears to include the loss for the year. While the 2017 report stated the pre-tax loss was (RM 10,696,373), the 2018 report stated that the 2017 pre-tax loss was (RM 15,027,196).

In the 2018 report, the 2017 web development write-off was not mentioned in the “loss of the year” section, which examines both 2017 and 2018 activities.

According to the 2018 report, some adjustments were made from the previous year. First, the company and the group had “omitted the contractual liabilities deriving from the loyalty points assigned to customers in the financial statements of previous years”.

In the screenshot above, Company refers to FashionValet, while Group refers to FashionValet and its subsidiaries.

For this reason, the contractual liabilities for FashionValet and its group were undervalued by RM 943,709 and RM 1,687,041 respectively.

As a result, the revenues of the Company and the Group were overstated by RM 743,332.

Another error to note concerns the measurement of Redeemable Convertible Preference Shares (RCPS).

An incorrect classification of RCPS as equity was found in the 2017 annual report, when these shares are in fact compound financial instruments that contain debt and equity components and should be valued, measured and classified separately as financial liabilities and equity.

Due to this error, the RCPS liability component of the group and the company was underestimated by RM21.283.806 and RM28.370.362 respectively.

As a result, the premium was overstated by RM23,444,459 and RM27,851,956 respectively for the Group and the Company.

3. In fact, in the last annual report, the remuneration of the directors decreased and there were no additional bonuses

In Aliff’s post, he mentioned that the directors’ allowance was increasing. However, if we look at the last financial statements as of 31 December 2020, the remuneration of the directors has decreased. In 2019 it was RM2.152.416, while in 2020 it was RM1.453.866.

The 2020 annual report also states that no director of the company has received or was entitled to receive any benefit other than remuneration “by virtue of a contract entered into by the company or an associated company with the director or with a company whose director is a shareholder, or with a company in which the director has a significant economic interest “.

4. 30 Maple was purchased in 2018 for RM 95 million

Aliff pointed out in his post that Vivy Yusof’s famous brand, dUCk, was actually separate from FashionValet itself despite being viewed by some as an internal brand.

So, in a recent SAYS article, why did Vivy share that FashionValet now fully owns dUCk? Well, that’s true now, but that wasn’t always the case.

With a little research, we found that duCk was actually under 30 Maple Sdn Bhd. But in FashionValet’s 2018 annual report, it was shown that 30 Maple (and later dUCk), was purchased by Fashion Valet Sdn Bhd in December 2018 for RM95 million by issuing 851,686 new common shares.

This may explain why Vivy also told DICE it was a decision to focus the business on Duck and LILIT. from 2019, because at that point FashionValet had just completely acquired 30 Maple.

5. Offline sales plummeted in 2020, although online sales differed only slightly

In the article with SAYS, Vivy said that FashionValet has been able to survive the pandemic for the past two years thanks to its decision to focus on dUCK and LILIT.

In fact, looking at FashionValet’s revenue in 2020, we noticed that it had mostly decreased in offline sales.

In 2019, the group’s offline sales were RM 34,222,203, but in 2020 that number dropped to RM 17,725,405.

However, the group’s online sales remained mostly the same, with a difference of less than RM1 million between the two-year online sales.

6. FashionValet has an accumulated loss of RM83 million as of the last financial statements

According to the financial statements and reports for the year ended December 31, 2020, the company had recorded a loss of (RM12.371.305).

In addition, the company’s retained earnings were -RM83,442,646. According to Investopedia, a company with a negative retained earnings balance would report “poor financial health”.

7. The involvement of Khazanah and PNB has improved the company’s profit margins

On August 5, 2022, Vivy Yusof released a statement to Malay Mail, saying, “Since Khazanah and PNB have invested, the company has more than doubled its revenue, improved our profit margins and expanded into retail. offline “.

We looked at FashionValet’s revenue over the years to ascertain if this was true, bearing in mind that Khazanah and PNB would have invested in the company around March 2018.

In 2017, before the two government-related companies invested in FashionValet, the revenue was RM57,909,265. If Vivy compared this figure to 2019 revenue of RM 101,755,629, it would be slightly less than double the profit.

However, it is important to note that in 2020 the revenue returned to RM 84,495,919.

But we must also consider the profit margin. We calculated net profit by finding profit as a percentage of revenue, using FashionValet’s balance sheet as a source.

In 2017, before PNB and Khazanah invested in the company, the profit margin we calculated was around -18.5%.

The following year (i.e. ended December 31, 2018) recorded a profit margin of -32.2%. PNB and Khazanah had invested earlier that year in March.

In 2019, however, the company improved its profit margin, which was around -15.7% at this point. In the year ended December 31, 2020, the company’s profit margin was approximately -14.6%.

If these are the figures Vivy referred to in her statements to Malay Mail, then it appears that the figures are in line with what she said.

What’s the next step?

As mentioned, FashionValet is invested by state investment funds such as Permodolan Nasional Berhad (PNB) and Khazanah Nasional.

According to Khazanah’s investment policy, its mandate is to increase Malaysia’s long-term wealth, i.e. to sustainably increase the value of investments by safeguarding the financial capital injected into the fund.

With FashionValet’s negative undistributed earnings, it’s no surprise that members of the public question Khazanah’s decision-making strategies behind his investments.

However, as Vivy points out, FashionValet’s profit margin appears to be improving slowly, so perhaps Khazanah is really focusing on the “long-term” aspect of her investment.

Whether it is the increased attention to the cultivation of ducks and LILIT. it will bring the results that Khazanah foresees, only time will tell.

  • Read other articles we wrote about FashionValet here.
  • Read other articles we wrote about Malaysian startups here.

Featured image credit: FashionValet