Voir in an aggressive revamp

KUALA LUMPUR: While not as big or exciting as its two other listed
competitors, Voir Holdings Bhd has been profitable every quarter since
its listing in 2007. Still, Voir is the only fashion stock trading below
its book value, at 0.77 times book, which suggests its shares are
undervalued on an asset basis with no premium for its long established
brand names. Plus, the company is now embarking on an aggressive revamp
to bring its brands to the next level.

Voir, which focuses
mainly on ladies apparel, has a market capitalisation of just RM61.8
million. Its shares were last traded at 51.5 sen, 30% below its net
assets per share of 67 sen as at March 31, 2011. It made a net profit of
RM7.7 million in 2010, or 6.4 sen per share, which translates to a
trailing price-earnings ratio of eight times.

Unlike its peers, however, its earnings have been fairly stagnant despite rising revenues over the last four years.

Between
2006 and 2010, pre-tax profit fell from RM11.81 million to RM11.03
million, while net profit declined from RM8.12 million to RM7.7 million.
Revenue, on the other hand, increased at an average of about 9% a year
from RM117.15 million to RM165.19 million over the same four year
period.

Voir was first started as a family business in Klang in
the late 1970s by the Seow family. It grew from one small retail outlet
in Klang into a formidable player in the local ladies apparel market.
Its house brands include VOIR, SODA and Applemints.

With a
slower growth rate in recent years, partly due to cost pressures such as
cotton and labour, Voir’s marketing and branding strategies have taken a
new direction.

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Looi is expected about the revamp of the SODA brand and the entry of Hung and Beltsos.

Hung has also brought all the labels under one roof with one merchandising system.

It is expanding its sub-label brands with the creation of a toddler
line, littlesoda, and increasing the number of food and beverage
(F&B) outlets in its chain, the Garden Lifestyle Store & Cafe,
to six. The group is also revamping its 29-year-old in-house label,
SODA, and has recently taken on not one, but two illustrious fashion
consultants for the revamp.

Gillian Hung was the first designer
hired to lead the team at SODA as the creative consultant in March of
2011. She is also the current president of the Malaysian Official
Designers’ Association (MODA) and creative consultant of Kenanga
Wholesale City.

“This brand has come a long way and needed
rebranding since the new target audience do not know of SODA. Now Soda
is back on track targeting young trendy executives whose taste is urban
vibrant,” Hung said in a recent e-mail interview with The Edge
Financial Daily.

The men’s, women’s and children’s wear will all
be put on the same fashion track instead of the different visions it had
before, according to Hung. She has also brought all of these labels
under one roof with one merchandising system.

“We have to look at
the entire budget and I will specifically plan how many SKUs (stock
keeping units) each designer will design and how many products the
merchandiser can order. It’s really not that simple. It will affect the
brand tremendously if is not done with a proper merchandising system,”
she said.

Then, there are also the common manufacturing concerns
which have troubled the local fashion industry that lie ahead for SODA.
Its sourcing and production are all Chinese made and Hung predicts
challenges in finding and sourcing the trimmings, the right materials
and the right factories.

The clothing will now follow more the
current New York City trends, and to help promote the new image a
fashion show is in the pipeline for November. The new clothes will be
“contemporary, edgy and super hip, with lots of detailing and
embellishments. [The collection will include] day to night wear, work
wear and casual and leisure wear,” said Hung.

She has set high
goals for the group and is building its workforce. This includes the
appointment of a second designer, Daniel Beltsos, who has over 20 years’
experience in Paris under his belt, as well as consulting with local
retail favourite, Lee Ann Maxima.

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The Garden Lifestyle Cafe at 1Utama is one of Voir's F&B outlets.

Australian-born Beltsos was hired in June to assist Hung on the
designing and overlooking of the mens’ and children’s department.

With
Beltsos at her side, Hung still feels there is much to do, saying “I
foresee it will take another year or two before the team can cope with
the pressure that I’m putting on them and to get used to the new system
that I’m implementing”.

However, Hung is clear and resolute
about her mission with SODA, saying, “Ultimately, I want to [bring] SODA
back to its glory days.”

Daniel Looi, Voir COO, concurs. He is
excited about the revamp of the SODA brand and the entry of Hung and
Beltsos. “They will bring a different perspective to the brand and the
company and we’ll have a better forward looking fashion team,” he said.

Looi
said most of Voir’s house brands, such as VOIR, SODA, South China Sea
and Applemints, are doing well. He added that the company is constantly
relooking its portfolio of brands and will discontinue any brand that is
not performing up to the mark. “We expect the company to do better in
the coming quarters,” he said. [You must be registered and logged in to see this image.]

The
interview with Looi at the firm’s popular Garden Lifestyle Cafe in
1Utama Shopping Complex in Petaling Jaya, also reflected the apparel
firm’s foray into the F&B business in an attempt to capture more
discretionary spending. After two years, Looi says Voir now has five
outlets with about 40,000 sq ft of restaurant space. A sixth outlet will
be opened in Alamanda, Putrajaya, this year. Management has decided to
stop at six for now.

“The restaurants are profitable, if not for
depreciation charges,” said Looi, who expects the business to add at
least 10% to group revenue.

For now, Voir is still very much a
domestic business, Looi said, adding that growth could be tremendous if
it succeeds in making inroads abroad. The company is already taking baby
steps toward penetrating the Middle East and West African markets,
having begun exporting to Pakistan and Ghana this year. With the
conscious effort being put into revitalising a business that’s been
around for over three decades, it would be interesting to see if Voir
will finally begin to close the gap with its two locally listed peers.