Shanghai gym chain secures new investment amid unhealthy speculation
Shanghai's largest gym chain Tera Wellness has announced a new round of financing worth 115 million yuan (US$16.4 million), amid speculation over store operation and refunding woes.
The investment, led by Junzhuo Capital Investment, is the biggest fund-raising effort in China's pandemic-hit gym industry in recent times, and the money will be used to improve its overall store operation and explore business opportunities like metaverse fitting, the gym brand said on its WeChat account on Tuesday afternoon.
"We have hope now, though it may be a long and tough path," Tera Wellness said.
Recently, screenshots of statements with Tera Wellness' official seals appeared online. They said that the gym brand was "poorly run with a broken capital chain," "owed wages to employees" and was conducting "store closures without refunding members." The allegations then went viral on popular social networks Weibo and Xiaohongshu.
Tera Wellness, founded in 2001 in Shanghai, has 150 outlets nationwide (many in Shanghai) and 1.3 million members.
On Monday night, the gym released a statement on its official Weibo and WeChat accounts and denied the allegations. It warned users about "fraud and other risks" and said it had reported the case to regulators and public security departments.
The new investment will bring confidence to the whole gym industry, which has been facing challenges and pressures during and after the pandemic, Tera Wellness said in its latest statement.