Fit 24 gym chain closed because shareholders invested outside?

According to the reporter's investigation of gym trainers (PTs) who are owed wages at the Fit 24 gym chain, about a year ago they heard about the company and major shareholders investing money in other fields.

Fit 24 closed, about 1,500 members' benefits affected

With 5 branches in Ho Chi Minh City, it is estimated that about 1,500 customers who are members of this gym chain have their benefits affected.

Fit 24 owed PTs and staff from mid-May to September 2024, before announcing its closure.

During the time of unpaid wages, Fit 24 launched a program to sell PT training cards worth 12.7 million for 24 PT training sessions, receiving a 2-year membership card worth about 11 million VND. This is a program with a very low package value, but the benefits are attractive compared to the programs Fit 24 has applied before, such as buying 30 million VND for 100 PT training sessions or 40 million VND for 100 sessions for old members. Normally, customers who buy a PT training package still have to buy an additional membership card with the right to use other services such as cycling, yoga, dancing, etc.

Because of its low price and affordable price, some customers bought this package right before Fit 24 closed. Many customers were upset because they wanted to buy a membership card for long-term training, but the gym suddenly announced its closure.

However, this promotion program did not help revive Fit 24's revenue. After being owed quantity, PTs no longer had the motivation or confidence to run sales, causing Fit's sales to plummet. Revenue was only a few hundred million VND at a club, then dropped to zero revenue.

Fit 24 closed because shareholders invested outside.

According to the investigation of the reporter of the Investment Electronic Newspaper - Baodautu.vn from gym trainers (PT) who are owed wages at the Fit 24 gym chain, about a year ago they heard about the company and major shareholders investing money in other fields. This is also the reason why Fit 24 is facing financial difficulties when customers' payment ability decreases.

Some PTs share that commission is the main source of monthly income for PTs besides daily training hourly wages and fixed salary (at a low level). Every month the system has to summarize sales very strictly.

In 2023, of the 5 Fit 24 gyms, 3 in Ho Xuan Huong (District 3), 3/2 Street and District 7 always achieved contract sales with PTs of around 1.5 billion VND/month. These 3 gyms shouldered the burden of the remaining 2 gyms, which were often at a level of almost no sales or a few hundred million VND per month. But after the 2024 Lunar New Year, the situation began to get difficult. In 2024, only a few months had high sales, the rest of the sales dropped to only a few hundred million VND. Fit 24 also began to tighten, cutting commissions for PTs according to revenue levels down to 15%, the highest level.

When the economy is in recession, customers do not spend money on long-term, high-value training packages like before. Before the recession, many customers bought training packages worth 300 million VND to enjoy VIP benefits, with their own lockers with their names in the changing room at Fit 24. The mechanism at Fit 24 is that PTs sell contracts for commission, so when PTs quit, other PTs do not want to continue training for old customers, or train with an unenthusiastic attitude, causing customers to lose faith in training.

According to PTs, it is possible that the company's use of money for other investment channels and the subsequent decline in sales are the double reasons that caused Fit 24's financial difficulties, leading to delays in payment, unpaid employee salaries, and then the decision to close the gym chain after repeatedly promising salary payment timelines, but they did not come true.

The largest shareholder of Fit 24 is currently Mr. Le Chi Trung. To revive the gym system, Mr. Trung asked for help from Ms. Pham Minh Huong, Chairman of the Board of Directors of VNDirect Securities Company. Ms. Huong initially agreed to the policy of buying back shares from Mr. Trung and participating in the reconstruction of Fit 24 because in the current period, many businesses are facing difficulties, not just Fit 24.

During the meeting with Fit 24 staff and PTs, Ms. Huong also shared that the investment in Fit 24 was not large. However, this deal was not successful because Fit 24 did not meet the buyer's paperwork requirements.

Source: https://baodautu.vn/chuoi-phong-tap-fit-24-dong-cua-vi-co-dong-dau-tu-ra-ben-ngoai-d226955.html