What are the 3 most valuable lessons Malaysian businesses can take from the Fashion Valet debacle?

There’s an awful lot to unpack with the Fashion Valet story that has been simmering since at least 2022 when former employees first started voicing concerns about the management of the company.

Over the last few weeks, the story has dominated conversations across the online and offline universe. Primarily because it involves public money invested by sovereign wealth fund Khazanah.

Let me rephrase that — it has dominated conversations across the online and offline universe — with one notable contributor missing: the brand itself.

Save for the very occasional press release or apology on Vivy Yusof’s Instagram, which by the way, has comments turned off — doesn’t help improve the public’s perception. There’s barely been a whisper from the firm or any spokesperson representing Fashion Valet (FV).

The silence has been deafening, allowing negative narratives to manifest themselves into reality.?

And now, the overarching perception of FV (the founders and the subsidiaries) — and it is just a perception at the moment — is that there has been some dodgy dealings behind the scenes and potentially with public money managed by Khazanah.

The irony is that, many of the comments about the running of the business are laughable in their naivety and ignorance. But with barely any public engagement by the founder or communications team, any brand equity is rapidly being eroded as perception becomes reality.

An example of this is the outlet in Bangsar Village which was temporarily closed for renovations earlier this year. FV barely mentioned the closure, and to be honest, no one really cared.

Then, the latest episode of the saga broke and keyboard warriors are now saying it’s a reflection of the company's‘ dire finances’.

That couldn’t be further from the truth, but without an official narrative around the matter leading up to, during, and after the renovations — it doesn’t matter. Perception is now reality.

Like in many countries, social media has become a powerful weapon of everyone with an axe to grind, reducing the ability of brands to determine how they are perceived.

Whereas once firms defined brands through their corporate-driven messaging, today, many brands are seeing themselves defined by what the average Joe says in a kopitiam in Klang.

It’s ironic because when times were good, FV and the other brands used social media really effectively to showcase the ‘human’ side of the brand and the founders.

As recently as October, Vivy Yusoff was waxing lyrical about the creation of the ‘dUck’ brand and how ‘Trust the journey’ meant ‘letting your heart go where it goes’. Good, wholesome advice from a respected entrepreneur to her close-to-2 million IG followers.

And there’s nothing wrong with flexing across social media. Leveraging its reach, engaging target audiences and adoring fans with nice stories and messages close to the brand’s promise.

A promise that was beginning to look suspiciously like a ‘do as I say’ promise, not a ‘do as I do’ promise. Slowly but surely, things began to go wrong.

While we’ll leave it up to the MACC to figure out if there have been any wrongdoing, the future of Fashion Valet, Duck and Lilit may be compromised, possibly forever.

And if these 3 brands die, it’ll be a real shame, because it may deter future entrepreneurs and sovereign wealth funds from launching or investing in fashion brands that help improve Malaysia's reputation locally and internationally while also providing jobs.

But the worst thing is that it will be yet another example of a perfectly good Malaysian brand undone by its inability to communicate effectively.

My conversations with people who have intimate knowledge of the brand suggested that the founders and senior management hired talented people in critical positions but didn’t listen to them or overruled them on key issues.

This happens a lot. Founders or CEOs create successful businesses and assume they have superpowers and know everything.

They’ll overrule the data-driven recommendations of experienced marketing experts they hired to give them data-driven marketing advice!

Instead they insist on the implementation of their own subjective ideas driven by emotions and immediately become sensitive if challenged.

This negatively impacts the internal brand culture. While this may not be an issue in the good times, when there is a crisis, the brand suffers externally quickly while consumers, perhaps energised by a bit of drama, release their frustrations with everything.

This doesn’t just happen to Fashion Valet.

After the last few years, I’ve witnessed a worrying trend with aviation, energy, health, finance, property, and other businesses. Founders, owners, and CEOs think that the good times will last forever. That their success is down to them and them alone.

They think that creating a brand is about putting words on paper only. They don’t understand that staff join because they expect the culture of the business is driven by the purpose or the brand promise.

Then when they join the business, they see that actually the purpose is just a statement and no effort is made to live by it. Founders and CEOs often make every decision based on what they believe irrespective of whether it contradicts the brand purpose.

Brands that stick to their purpose and values are easier for consumers to align themselves to. It’s all very well for a brand owner to post deeply emotional comments on Instagram about Gaza, telling consumers to do something to help Gazans and we should choose wisely how we spend our money. But if you are flexing your wealth at the same time, you risk becoming a target for keyboard warriors.

Those consumers will pay a premium price for a premium brand, but that brand shouldn’t stray from its purpose and values.

Fashion Valet had sales of RM113,000,000 in 2022 but made a RM35,000,000 loss. While the founders should be proud of their achievements, they are not geniuses. These days practically anyone can start a business, and if you have a first-mover advantage, it’s not that hard to make a business a success.

But until you’ve built a strong brand, you are nothing more than a trader. As FV is finding out, they have a brand generating more than RM100 million of revenue but they don’t have a strong brand; and the jury is still out on whether they can survive.

So what are the 3 primary lessons Malaysian businesses can take away from the Fashion Valet debacle?

1) Just because you start a business or are given one on a silver platter by a parent or even the Prime Minister, doesn’t make you a corporate genius. Have some humility and know your limitations.

Don’t just hire good people and then ignore them — instead leverage their expertise to grow your business. And remember, the good times won’t last forever. If and when a crisis hits, if you don’t have any brand equity, your biggest fans may turn against you in a heartbeat.

2) Have a brand strategy and don’t convince yourself that a series of random tactics are a strategy. The brand strategy helps the organisation stay on brand (and know exactly what to do in a crisis, something no one appeared to manage at FV) while giving you the direction necessary to build the brand externally while sticking to your DNA.

3) If you have a charismatic personality leading the brand, make sure they understand their responsibilities to the brand. Sure they can build their own brand, but they are not the brand — Vivy Yusof really could learn a thing or two from Tony Fernandes at AirAsia.

Brand owners and guardians are a critical element of a brand strategy. During the good times, FV and the owner were very good at posting promotional content, getting likes and comments, but they fell short at fostering engagement and connections.

When the wheels fell off, both FV and VY stopped posting altogether and yet, this is when a good brand strategy supported by a talented social media operator is like gold dust. When disaster hits — and it always does — brands must respond quickly, effectively, and authentically.

In the face of a storm, a clear message communicated consistently and empathetically in a quick and transparent manner is crucial to weathering the storm. It’s also important to have a plan in place to address comments. It’s enormously challenging and requires a competent team but if you want to retain consumer confidence and loyalty to recover quickly, this is what it takes.

Narratives around FV are now being determined by commentators. Many of those narratives are uncomplimentary. This failure to engage and show the human side of the brand means that FV will struggle to get through this crisis.

And that would be a shame, a big shame for everyone.

All brands, large or small, will face challenges at some stage in their evolution. These can range from defective communications or packaging to a compromised product that costs lives.

Some brands like AirAsia and Zus Coffee navigate crises skilfully, while others such as Malaysia Airlines, Delifrance, TrueFitness or Malaysia's infamous taxi service struggle.

Despite their very different backgrounds, sizes and industries, these brands that struggled had three things in common, they assumed the good times would last forever, took their customers for granted and didn’t have a crisis plan.

If you are concerned about your #brand and its ability to deal with a crisis, it might be time to talk to FUSIONBRAND | Brand Consultants or Marcus Osborne

You have nothing to lose and everything to gain.

#branding #Malaysia #communications #crises