Creditors hound spa director at meeting

[Musicwhiz]

A very sad situation - the spa chain only has $0.0614 in assets for every dollar is owes. It looks like most of the creditors would not be able to recover much at all....

Nov 17, 2010
Creditors hound spa director at meeting
By Jessica Lim

Disgruntled customers of spa chain Subtle Senses signing a petition seeking a government probe yesterday before attending the meeting with the spa's director. -- ST PHOTO: KEVIN LIM

ABOUT 1,000 people, mostly disgruntled customers of spa chain Subtle Senses that went belly up last month, turned up for a creditors' meeting in Suntec City Mall yesterday.

Also in the 100m-long queue outside Rock Auditorium yesterday were the defunct spa's other creditors, including landlords and other suppliers.

All wanted to know their chances of recouping what Subtle Senses owed them - but most came away none the wiser after four hours.

When a number of spas closed down suddenly in the past two years, leaving customers stranded with unredeemed packages, spas that were apparently doing better, including Subtle Senses, stepped up to take over the customers from the failed spas, providing the services out of goodwill.

But Subtle Senses, with more than 15,000 'rescued' customers on top of its own 8,000, also tanked. Now, its customers have in turn been absorbed by nine members of the Spa, Beauty and Wellness Alliance (SBWA).

At the meeting yesterday, liquidators Stone Forest and Subtle Senses director Billy Hardie were in the hot seat, fielding questions from shouting, jeering creditors.

Some customers wanted to know what checks were done before Subtle Senses took over True Spa in April, and whether they were going to get anything back. Others accused Dr Hardie of pocketing their money and even of fraud.

He apologised to his creditors and told them he would work with the SBWA to ensure customers could redeem their packages.

Figures released at the meeting indicated that Subtle Senses was $12 million in debt, but its assets amounted to only $737,254 in realisable value.

Dr Hardie told The Straits Times: 'There were over-bookings, staff shortages and reduced sales at our outlets. We have no choice but to close.'

Design company Toolbox Design director Jerry Wee, 38, said the spa chain owed him about $27,000, and so 'shouldn't be able to just close shop just like that. I hope someone looks into their accounts'.

Meanwhile, more than 300 customers have signed a petition asking the Government to begin a probe.

[sgd]

I patronized this place before. They started out with 1 unit china town years ago and did very well, within 2 years they rented the next door unit and expanded and then shortly thereafter expanded again to another unit across the street. Later I heard they took over another spa outlet but made a mistake also absorbed those customer's already paid subscriptions to the previous mgt that was when I think all their troubles began.

[newborn1000]

Weird.........they had over-bookings and still closed down?

Ironic, that there are reduced sales too.........

I guess, on hindsight, over expansion (taking true spa) is very very bad indeed

[bluechipstamp]

Subtle Senses almost RTO into Multistar (now delisted) just a few months back. If it had succeeded, it won't be just its customers who are crying now.

In general, most RTO coys are below par. Wilmar is a rare exception. But somehow, the market freq'ly reward RTO news handsomely, expecting all the frogs to turn into princes.

[sgd]

it's not over expansion that did them in .. well maybe part of the reason. Rather I think those 15000 old customers from previous spa with unredeemed packaged signed under the old mgt which subtle senses gave free service out of goodwill those were like "toxic asset"

[arthur]

Subtle Senses took over True Spa's clients.

Never expect True Group spa division will collapse.
True Fitness and Yoga still around but makes ppl jittery about signing up though.

[edragon]

By putting money into the business as an advance in the form of a package, clients will be treated as shareholders in times of liquidation.
In HK, it happened many years ago in the cake & pastry business. Also it happened to many spa businesses in recent times and clients have no recourse.
Not a smart move to pay advance money, I think. Better to pay "cash & carry" if you like spas.

[Musicwhiz]

Not a smart move to pay advance money, I think. Better to pay "cash & carry" if you like spas.

I think this advice holds true for most other things as well, because the chances of businesses going bust is pretty high considering stiff competition. One never knows if their "investment" will disappear the next day quicker than Puff The Magic Dragon.....

For myself, I always drop by to book an appointment whenever I want to have a massage. If there are no slots, then I just come back later or some other day. A little more hassle, yes, but at least you don't risk losing an arm or a leg.....

[Musicwhiz]

Taken from the blog http://www.caveat-emptor-singapore.blogspot.com/

Subtle Senses victims seek answers

05:55 AM Nov 17, 2010

by Neo Chai Chin

SINGAPORE - At the start of liquidation last month, it had $1,623 cash in hand and about $44,000 on its bank book.

In contrast, claims against Subtle Senses, comprising mainly the value of its customers' unused treatments and the Central Provident Fund money owed its staff, have hit about $11.8 million.

On a day when hundreds of victims were frustrated by a lack of answers at the spa's creditors' meeting at Rock Auditorium at Suntec City yesterday, the cash standing of the company - and its ability to make refunds - was one of the few facts that became painfully clear.

With liabilities amounting to $12,083,222, according to a statement of affairs projected on two screens, the best-case scenario of Subtle Senses' deficit, based on its assets' book value, is $7 million. The worst-case scenario: About $11.3 million.

Just two years ago, it made profits of $2 million. Last year, it made $1 million, said Subtle Senses director Billy Hardie.

As some customers kept demanding their money back, others seemed resigned to their loss and instead questioned Subtle Senses' takeover of True Spa. A handful asked for better terms in the rescue plan organised last week by the Spa Beauty and Wellness Alliance (SBWA).

The questions from creditors such as suppliers and clients came laced with bitterness and sarcasm.

On why Subtle Senses assumed on April 25 the business operations of True Spa, which had been making losses since 2005, Dr Hardie said he was not in a position to comment. When asked how much Subtle Senses had paid True Spa for the transfer of operations, he did not provide a figure.

But he said "many factors" led to Subtle Senses being unable to "coordinate its workload" after taking charge of True Spa's Takashimaya and Cuppage Terrace outlets, for instance, many clients had booked appointments but did not turn up.

Dr Hardie said he would work closely with the SBWA to retrieve records of the monetary value of customers' unused packages, so they can claim their treatments at other spas.

He also said the spa's two biggest debtors were HealthTrends Medical Group (owing $600,000) and HealthTrends Medical Investments (owing more than $400,000). According to Accounting and Corporate Regulatory Authority records, Dr Hardie is director in both companies.

Five people - three customers, the ex-finance manager of Subtle Senses and a lawyer acting for one of the spa's landlords - were also appointed yesterday to form the Committee of Inspection (COI) to oversee the liquidators. The COI may request further investigations into Subtle Senses' finances if it deems necessary.

The dissatisfaction was clear at the end of the meeting. "A lot of talk only, but no results," retiree Albert Lim, 77, who was a True Spa customer, told MediaCorp.

Said another customer and a COI member, Mr Nimrod Chuang, 33: "It was supposed to be a meeting where they addressed details of finances, but this was not shown."

[sgd]

I wonder about their employees their masseurs and facial therapists. All the focus is on the creditors and customers getting their money back what about their employees? have they been owed any back wages? Worse are those that cannot leave yet but have to stay on and help to clean up the big mess and wondering if they are still getting paid at the end of it.

strange that ntuc has not step in to the picture to represent the workers.