Vertice to sell 60pc of fashion retail business to founder

KUALA LUMPUR: Vertice Bhd plans to sell a 60 per cent stake in its fashion retail business to its founder and executive deputy chairman Seow Khim Soon for RM32.62 million.

Under the agreement signed yesterday, Seow will give up his directorship in the group to concentrate his efforts on managing the fashion retailing business parked under Kumpulan Voir Sdn Bhd, and to absolve from any potential conflict of interests.

Vertice said it would continue to provide corporate guarantee to the banking facilities procured by Kumpulan Voir.

The deal is expected to be completed in the first quarter of next year.

The company described the proposed disposal as strategic as it allowed the reallocation of financial resources to fund its construction division, while continuing to participate in Kumpulan Voir’s business.

The fashion retailing business, it said, had been challenging due to stiff competition from local and international brands and soft consumer sentiments in Malaysia, resulting in the closure of at least seven non-profitable outlets last year.

Incorporated in 1988, Vertice is primarily involved in property, investment holdings, designing, branding, ladies’ apparels, footwear and accessories.

Its original cost of investment in Kumpulan Voir’s 60 per cent stake was RM22.28 million.

Kumpulan Voir contributed 85 per cent to the group’s overall revenue, and registered a net profit of RM1.71 million in the year ended December 31 last year.