30 May 2022
Hussle owner goes bust owing £5.4m – pre-pack deal snapped up by Tegelaars and Chmyshuk
BY Frances Marcellin
The company behind fitness aggregator Hussle – Sandcroft Avenue Ltd – has collapsed, owing £5,362,000.
A new company, Archway Fitness Ltd, set up on 12 April, has acquired the Hussle name and assets for £175,000 as part of a pre-pack administration deal which concluded on 6 May.
Archway is owned 50:50 by former Hussle shareholders Harm Tegelaars and Maxim Chmyshuk of Digital Horizon VC. Tegelaars' appointment to the Hussle board was announced on 10 May.
Following the deal, HCM understands the company has been restructured and refinanced, with Archway Fitness taking on contracts, suppliers and partnerships. The Hussle name will continue and all existing Hussle vouchers will be honoured by the new owner.
In addition, 16 of the 18 staff will continue their employment and Hussle’s COO Neil Harmsworth and CEO Jamie Ward will run the Hussle business for Archway Fitness.
The company says the focus now is to continue expanding the Hussle operation through the existing rewards-based partnerships, such as those already in place with AXA Health, BUPA, The AA and Caterpillar Health.
Speaking at the time of his appointment to the Hussle board, Tegelaars said: “The fitness industry and its growth has been a lifelong passion for me and I’m delighted to return with Hussle.
"I look forward to building on the marketing collaboration opportunities the team has created – for too long, our sector has missed out on the exposure and revenue that other sectors can bring through their marketing power and geographic reach."
Sandcroft Avenue Ltd, incorporated in 2009, originally traded as PayAsUGym, rebranding as Hussle in 2018.
The business expanded quickly and reported overfunding its crowdfunding campaign to HCM back in 2019, when investors included Channel 4 Ventures and AlbionVC.
According to recent filings at Companies House, outstanding creditors include Shawbrook Bank (£3,225,000), the Future Fund (£1,538,457) – a UK government scheme supporting companies with financing difficulties due to the Coronavirus outbreak – and also Channel 4 Ventures (£37,001).
“The business followed an aggressive growth strategy and was initially backed by individual investors and leading venture capital firms,” said administrator Nick Edwards of RSM Ltd. “Due to the costs of developing the platform and winning market share, the company was initially loss-making and therefore focused on raising periodic investment rounds to sustain its operations.
"Management believed the company was successful in implementing this high-growth strategy as it established a network of 1,400 gyms, pools and spas which they believed represented around 20 per cent of the UK supply.”
The administrator's report describes how Hussle’s financial position worsened under the weight of rebranding costs in 2018 and outlines how trading was “severely impacted” when facilities started closing due to the pandemic.
Efforts to raise additional funding in 2021 were unsuccessful and an ensuing search to find a buyer through a share sale also proved fruitless, so the pre-packaged administration deal was sought in Q1 of 2022.
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