Hong Kong’s Physical Fitness could permanently close

One of Hong Kong’s oldest gym chains is closing down “temporarily” due to financial troubles.

Physical Fitness & Beauty, a name that has been around in Hong Kong for 38 years, will close for an unspecified duration as it looks to restructure and seek financing from new investors. In a translated statement, the fitness chain noted that it would remain closed until its new investors figure out new terms with landlords for its branches. Once the new contracts and terms are finalised, customers will be able to continue using their existing plans.

The main reason for this sudden pause in business is the threat of a potential civil claim from the Mandatory Provident Fund Schemes Authority over HKD$3 million in unpaid Mandatory Provident Fund (MPF) contributions for its 740 employees. Physical has just four days to figure out how it will pay the hefty amount before the MPFA takes action. Physical attributes a rough economy for its unforeseen financial shortcomings, and an aggressive price increase from landlords after the COVID-19 pandemic.

Other reasons for insolvency could be largely attributed to the shift towards boutique-style gyms by consumers, the lack of social media presence (the gym serves over 1.5 million people but has no dedicated account), and its sales model in signing members up for long contracts using one-time fees.

(Image: Physical Fitness)