Startech Changes Name to VASHION; Aims to Make `Louis Gianni' Leading High-End Fashion Brand in PRC

Startech Changes Name to VASHION; Aims to Make `Louis Gianni' Leading High-End Fashion Brand in PRC

November 16, 2007

    SINGAPORE, Nov. 16 /Xinhua-PRNewswire/ --

    -- Name change reflects the Group's current business
and corporate  
       profile following successful acquisition of Red Flag
Group for 
       $8.5m

    -- Group now operates 77 branded retail fashion stores
in major cities 
       in the PRC; 150 by 2008

    -- Plans to achieve further growth through organic and
M&A route
 
    SESDAQ-listed Startech Electronics Ltd which has
successfully completed its acquisition of Red Flag Group in
October 2007, is proposing to change its name to VASHION
Group Ltd to better reflect its current business and
corporate profile as a high-end fashion retail brand
company in the PRC.

    Together with the proposed name change, the Company is
also seeking shareholders' approval at an EGM for a mandate
to allot and issue new shares for future funding purposes
and to change its auditors. A circular for these three
resolutions has been dispatched to shareholders.

    Startech, which has spent the past two years
restructuring its capital and debts financing is now in a
stable financial position, with its existing electronics
business now showing decent profits. 

    However, in its quest to rebuild its profit base with a
sustainable recurring business, Startech scoured for a new
business and recently completed the acquisition of Red Flag
Group for S$8.5 million.

    The Red Flag Group, through its subsidiary Shenzhen
Louis Gianni Costume Co Ltd (SLG), is engaged in the
business of managing, distributing and retailing
mid-to-high-end men's apparel such as trousers, shirts,
suits, jackets and woolen garments and accessories in the
PRC under the brand name "Louis Gianni".

    SLG focuses on brand management and outsources
manufacturing. It sources its apparel from an approved list
of vendors in the PRC who are able to satisfy its stringent
requirements on workmanship and apparel design. These
approved vendors work closely with its in-house design team
on design, materials, color and other details for each batch
of apparel supply.

    SLG currently operates 77 stores throughout the PRC, as
at October 2007. These stores are located in major cities
including Beijing, Tianjin, Nanjing and Jinan as well as in
provinces such as Fujian, Jiangsu and Shandong.

    Among the 77 stores, two-thirds of these are
self-managed stores where SLG sells its "Louis
Gianni" products directly through stores located at
major shopping malls and hotels. SLG also licenses third
parties to sell its products and operate retail stores
under its brand name. Then there is a small but growing
number of sales agency stores which are appointed to retail
"Louis Gianni" products on a consignment basis.

    This licensing program allows SLG to rapidly expand its
distribution network while at the same time, minimize
capital outlay.

    Notwithstanding the different modes of distribution and
retailing channels, SLG is responsible for product pricing,
marketing and promotion and related strategies and
policies. This is to maintain quality and service
standards.

    Commenting on the new business, Executive Chairman, Mr
James Tan says, "The acquisition of Red Flag Group is
a win-win proposition for both parties. For Startech, it
has allowed us to gain an immediate foothold into the fast
growing fashion apparel market in the PRC. On the other
hand, as part of a listed entity, the Red Flag Group will
now be able to tap into the capital market to raise more
funds for its expansion plans. Given the successful track
record of the Red Flag Group in managing the fashion
apparel business under the "Louis Gianni" brand
name, we are confident that this acquisition is a viable
business alternative."

    The Red Flag Group has been profitable for the past
three financial years. In fact, the compounded annual
growth rate for the past three years works out to be 34.3%.


    For FY2006, it recorded revenue of RMB36.4 million and
profit after tax of RMB5.72 million. Indeed, the unaudited
profit for FY2006 has more than exceeded the profit
warranty of not less than S$1.0 million (at current
exchange rates) in profit before tax. For FY2007, the
vendors have given a profit warranty of not less than S$2.0
million in profit before tax.

    As part of the deal, Mr Ngai Kat Man, who is the
founder of SLG, has agreed to remain with the Group for a
fixed term of 5 years. He brings to the Group 16 years of
experience in the apparel retail business and was
responsible for creating the "Louis Gianni" brand
for the PRC market.

    Under a new name and new management, Vashion has mapped
out an expansion plan which involves growing the business
organically as well as through acquisitions of other
fashion operators in the PRC.

    For a start, it intends to expand its sales network to
150 outlets by 2008. This will be backed up by an enhanced
supply chain management and warehousing system.

    Of the emerging fashion retail industry in the PRC, Mr
James Tan says, "With the rapid economic growth in the
PRC, the Chinese middle-class is also rapidly growing and is
estimated to be more than 500 million by 2020, according to
National Bureau of Statistics of PRC. This brings along a
huge potential for mid-to-high-end fashion brands like
Louis Gianni, to grow as demand for high quality and
fashionable branded apparel rises."

    About Vashion Group Ltd

    Listed on SGX-SESDAQ on 30 July 2001, Vashion Group
Ltd, previously known as Startech Electronics Ltd (the
"Group"), was previously engaged in the business
of the provision of electronics manufacturing services and
the distribution business and switchgear design &
assembly business. This was later changed to the
distribution of equipment and consumable materials for the
electronics industry and switchgear design & assembly
services in 2004.

    With the successful acquisition of Red Flag Holdings
Co., Ltd in Hong Kong, the Group has added fashion brand
management business, focusing on the management,
distribution and retailing of mid-to-high-end men's apparel
in the PRC under the brand name of "Louis Gianni"
to its portfolio. Vashion focuses on its core competencies
of brand management by working closely with reliable
vendors for the manufacturing of its products, and by
employing an efficient retail structure, which includes an
attractive licensing program. 

    The Group currently operates 77 stores located in major
cities including Beijing, Tianjin, Nanjing and Jinan,
throughout the PRC, as well as in provinces such as Fujian,
Jiangsu and Shandong Among the 77 stores, two-thirds of
these stores are self-managed stores located at major
shopping malls and hotels. The remaining stores are
licensed third party stores who sell its products and
operate the stores under its brand name, and sales agency
stores which are appointed to retail "Louis
Gianni" products on a consignment basis.


    Contact Information:

    August Consulting
     Tel:  [phone]   
     Fax:  [phone]

     Eunice LUA
     Email: [e-mail]

     Dennis KHNG
     Email: [e-mail]