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8 Things You Should Know about California Fitness’ closure in S’pore

2016-07-20 , 11:36 am

Ever since news about California Fitness branches closing down in Hong Kong broke in Singapore and shocked pretty much everyone, I’m pretty sure we have all been waiting to see if the effect will spill over to their branches overseas, or more specifically, Singapore.

If you have not known yet, it’s official. It was announced on 20 July that all California Fitness branches in Singapore will cease all operations with immediate effect until further notice.

Here are 8 things you need to know about California Fitness sudden closure in Singapore.

It all started in Hong Kong

Just a short recap: the entire saga started in Hong Kong when California Fitness members turn up at their gyms on Tuesday (12 July 2016) only to realise that the gyms are closed down without warning. It was reported that the loss incurred by members is estimated to be HK$1 billion.

The gym was reported to have a debt HK$130 million

Their financial woes first came to light due to a closure of one of their outlets on 4 July 2016. The Labour department stated that they sent officers to raid some of the outlets when they received complaints from California Fitness’s employees about wages owed to them.

It was reported by South China Morning Post that the fitness gym owed about S$22.6 million in operating expenses and rental. Overdue wages are estimated to have exceeded HK$10 million.

They made a loss of HK$117 million over the past two and a half years and only had HK$16 million cash left.

Two senior executives were arrested in Hong Kong

Two senior executives, the company secretary and a secretary, were arrested for violating the Trade Descriptions Ordinance. The sole director Wong Lun is wanted by the Customs and Excise Department as well.

Raffles California Fitness, not the first outlet to close in Singapore this year

In February this year, the California Fitness outlet at Ngee Ann City was closed down due to “purely commercial” reasons and will work to “minimise impact to business, operations and affected members”. Then, they assured the public that they have three other outlets at Bugis, Novena and Raffles.

California Fitness Hong Kong was publicly condemned in 2016

California Fitness Hong Kong was publicly named and shamed by the Consumer Council in Hong Kong this year for their aggressive sales tactics and ‘intimidating and misleading’ business practices. They had 296 complaints alone in 2015.

On the other hand, California Fitness Singapore was voted #1

In AsiaOne’s People’s Choice Awards 2016, California Fitness was voted #1 in the Health and Fitness category for 5 years running.

It came as a surprise to California Fitness Singapore as well

A quick check on California Fitness Singapore Facebook page showed that the closure was unforeseen. The latest post on their Facebook page was made on 17 July 2016 showing their GroupX schedule from 18 July to 24 July 2016.

California Fitness might be back. Might.

According to a report by Channel NewsAsia, Tim Reid and Theresa Ng of Ferrier Hodgson were appointed as provisional liquidators for JV Fitness Pte Ltd (California Fitness).

JV Fitness does not have adequate liquid resources to continue its operations and therefore all outlets in Singapore will be closed from today until further notice.

The Provisional Liquidators will quickly explore options that may be available to enable the business to operate but for time being, it is necessary to cease the operations of the fitness centres with immediate effect.

Online petition to get money back

An online petition, Get California Fitness to refund its victims’, addressed to Mr Lim Hng Kiang, Minister for Trade and Industry (Trade) has over 1,000 signatures but lawyer warns that any money recovered will usually be given to landlords, taxes and wages before any can be paid to customers.

So keep your fingers crossed, yeah?

Top Image: straitstimes.com

This article was first published on goodyfeed.com