SINGAPORE – A day after the sudden closure of all its outlets, Ritual Gym co-founder and chief executive Brad Robinson blamed the Covid-19 pandemic for its business woes.
On Feb 29, members of the boutique fitness gym were shocked when they received an e-mail informing them that it was ceasing operations at all four locations in Orchard Road, Holland Village, Tiong Bahru and Joo Chiat, and that it has “placed the company in provisional liquidation”.
Robinson told The Straits Times that business was “booming” before the pandemic, but it eventually tanked after a key investor pulled out of a deal that would have kept them afloat.
He said: “So many gyms and businesses have failed and we thought we were able to beat the trendline and the truth is, this is a direct result of the pandemic.
“We had secured a very large financing round from a big investment bank and they were supposed to fly here at the opening of our Orchard Road branch to announce the deal. It was around $20 million, the plan was for them to come two days after the circuit breaker (in April 2020).”
Noting the the deal fell through, he added: “No one wanted to invest in a fitness brand no matter how sexy it was, one month before the pandemic or how much money it was making.
“We were burning money and nobody knew when revenue was going to come back.”
The business had run out of cash and it had to “scramble” to try to avoid liquidation, he said. “We never thought we’d have to close but due to pretty brutal circumstances we’ve had no choice.”
The Business Times reported that the company Cheat Day, which owns and operates Ritual Gym, posted a net loss of $1.4 million for its full year ended Sept 30, 2021.
It had posted four consecutive years of net losses between 2017 and 2020. The company’s revenue was $1.6 million for FY2021, down from $2.8 million the year before.
Noting that Ritual was one of the early boutique fitness brands here, Singapore Fitness Alliance president Sean Tan said: “Its unfortunate closure was due largely to the ‘Covid overhang’ – where it struggled to repay large rental arrears in a post-Covid environment with increased competition, rising rents and costs and manpower shortages.”
With provisional liquidators Cameron Lindsay Duncan and David Dong-Won Kim of KordaMentha taking over proceedings, the 11-year-old gym’s abrupt closure has left members in limbo.
A number of them have taken to social media and networks to air their grievances, with one asking on Reddit: “What are the chances of getting back my money?”
Memberships were priced from $219 a month (three months unlimited, off peak hours) and from $349 for 10 sessions.
It is the latest casualty in the fitness industry after Haus Athletics, UFC Gym and Fenix Fitness shuttered in 2023.
In September 2023, the Consumers Association of Singapore reported that consumers lost more than $20,000 in advance payments for gym and fitness club packages in the first six months of the year.
Its president Melvin Yong said then that consumers should consider shorter-term memberships or pay-per-use options, as it is generally challenging to recover their monies for prepaid memberships in a sudden business closure.
While Ritual’s shutdown has angered some members, particularly those who paid upfront for sessions, Robinson said he has also received “hundreds of messages” of support from current and former clients. He also told BT that its 35 full-time employees will be compensated.
Assuring members that they will try to resolve the matter, he added: “What I want people to know is that it’s not like other cases where we took the money and ran. We’ve hired a high quality liquidator and we’re trying to be as transparent as possible.
“We’ve been a pretty upstanding member of this fitness community in this country for a long time and I would be devastated if people would think otherwise.”
