Hong Kong gym chain Physical Fitness ‘temporarily’ shuts down after HK$3 million unpaid pensions payments
Hong Kong Free Press
Hong Kong gym chain Physical Fitness has announced a “temporary closure” citing high rents, after pensions authorities warned of legal action against the fitness company over HK$3 million outstanding contributions involving 740 employees.
The 38-year-old fitness chain on Friday posted the announcement on its website, saying “a number of landlords have maintained high rents” as Hong Kong’s economy recovered from Covid-19.
“Regrettably, Physical will temporarily close all its business on September 6, 2024, for restructuring,” the chain wrote in a Chinese statement. It did not say how long the closure would last.
“New investors” had promised that customers would be able to continue their existing fitness plans, private trainer programmes, and beauty treatments with Physical, it said, without naming the new investors.
The “new company” had been negotiating with landlords of Physical’s branches to keep the leases and would resume business once a deal has been reached, it added.
The fitness chain had “witnessed the ups and downs of Hong Kong’s economy” and it was an “utterly regrettable and painful decision” to close, the statement read.
Physical was established in 1986 and had 23 branches across the city, serving over 500,000 customers, according to the chain’s website.
Its fitness centres in Tai Koo and Sha Tin were shuttered on Friday after the announcement, HKFP observed.
The move came days after the Mandatory Provident Fund Schemes Authority (MPFA), Hong Kong’s pensions regulator, warned of legal action against Physical over outstanding contributions for its staff.
The authority earlier said Physical had not paid contributions for 740 employees to the MPF pension scheme in June and July, which involved a total of about HK$3 million, according to local media reports.
Failure to settle the outstanding contributions could lead to a civil claim against Physical, the authority said.
In Hong Kong, employers are required to contribute five per cent of their employees’ income to the MPF, with the maximum compulsory contribution capped at HK$1,500 for employees earning more than HK$30,000 per month.
Failure to do so is an offence with a maximum penalty of a HK$450,000 fine and four years in jail.
HKFP has reached out to the MPFA for comment.
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