Spas and Wellness Centres Company Closure and Rescue Options
Spas and wellness centres face increased operating costs and complying with ever-updating regulations while trying to retain customers as spending habits and acceptable standards change. If your spa and wellness centre is in financial difficulty or is experiencing other financial challenges, speak to us for tailored, regulated insolvency advice.
In this guide, we will help you navigate the complexities of insolvency, give you practical advice for your spa and wellness centre, and help you make the most informed decision about its future. Depending on your circumstances, this could involve restructuring, refinancing, or winding down operations.
Common financial challenges for spas and wellness centre companies
We can help advise on specific financial issues that a spa and wellness centre can face, including but not limited to:
- High operational costs
A spa and wellness centre’s operating costs can put a strain on its finances. In addition to high utility bills, staff may need training and retaining, with unique skillsets needed to carry out massages or operate specialist equipment. In addition, spa facilities need regular maintenance and renovating to keep attracting customers. Speak to us if operational costs have risen and your company is struggling to cover them. - Remaining regulatory compliance
As a spa and wellness centres’ business focuses on customers’ health and comfort, staying compliant with changes to health and safety regulations is of utmost importance. These could include costly facility and equipment upgrades to meet licensing requirements, and extra training for staff. Failing to comply with those required regulations can lead to fines for non-compliance, and the additional expense of challenging or paying them. - Poor customer retention
While spas and wellness centres may welcome one-off customers, memberships and recurring customers may generate the bulk of their income. A decline in memberships or a failure turn one-time customers into repeated ones can strain the company’s finances. You may have to raise prices to cover the shortfall, further putting off customers from returning or leading to more cancellations. We can detail your company’s options if it risks insolvency and outline the best way forward. - Bounce Back Loans (BBL)
The government’s Bounce Back Loan initiative was very important during the pandemic. However, companies are now having trouble repaying them. We can give you advice on what options you have when it comes to repaying the loan and how a BBL would be treated in various insolvency options.
How we can help rescue your spa and wellness centre company
Below are two formal insolvency procedures that would allow a spa and wellness centre to continue trading whilst being protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a formal repayment plan, which allows companies to repay their unsecured debts in instalments tailored to what the company can afford monthly. This would include managing property and lease negotiations and aiding in negotiations with landlords. It would allow your spa and wellness centre to continue trading and to retain all your company’s goodwill and reputation with customers, whilst being protected from any creditor legal action. CVAs can last for up to five years and once concluded any remaining unsecured debt is written off.
More on a Company Voluntary Arrangement - Restructuring your spa and wellness centre company through administration
Administration is a temporary state for a company that halts debt enforcement and creditor action, allowing your company to continue trading. We will act as administrator and try to restructure your company in order to rescue it as a going concern by turning your company into a leaner, more profitable operation whilst also making it more appealing to potential buyers.
More on administration
How we can help close and liquidate your spa and wellness centre company
If your spa and wellness centre is insolvent and creditor pressure has reached a level where the business cannot continue to trade, liquidating the company would draw a line under its operations and write off its unsecured debts.
- Close your spa and wellness centre down via a Creditors Voluntary Liquidation (CVL)
A Creditors Voluntary Liquidation (CVL) is a formal insolvency process designed for companies that are insolvent and have unmanageable debt. The process would close your spa and wellness centre, terminating leases and hire purchase agreements, stopping any further payments and writing off any unsecured debts and arrears. If eligible, employees and directors will be able to apply for statutory entitlements such as redundancy and holiday pay. If the company cannot afford to pay staff entitlements, claims can be made through the Redundancy Payment Services.
More on a Creditors Voluntary Liquidation - Close your spa and wellness centre down and start again via a pre-pack liquidation
A pre-pack liquidation is an informal term for a type of liquidation where one company pre-purchases the assets of an existing company that is then liquidated. This allows you to close your spa and wellness centre, while continuing its business under a new company without any unsecured historical debts. You can also transfer your employees to the new company under TUPE regulations, ensuring their continued employment. In some cases, you may be able to reuse your company’s trading name, but this can be complex. We can advise you on these processes and how they work.
More on pre-pack liquidation
Commercial finance for spa and wellness centre companies
If the company has an otherwise healthy cash flow, but a large, upcoming payment risks its future, commercial finance could be a viable solution. There are a range of finance options potentially available that can help cover a one-off expense or a gap in the company’s incoming payments. Speak to us for a more detailed breakdown of which commercial finance options best fit your company.
More on commercial financeHow to get in touch with us: The next steps
If your spa and wellness centre is facing financial difficulty, it’s important to understand the different closure and recovery options available. Our initial advisers will offer a comprehensive explanation of the different options available to you and our experienced consultants will look at tailoring our processes to your spa and wellness centre’s circumstances.
Contact our initial advisers, who can advise you on your company’s solvent position and outline the options best suited to its circumstances.
- Speak with our initial advisers
Make contact with our team, via phone, filling in a form, or online chat. We will assess your circumstances and, if suitable, arrange a free consultation with a consultant to discuss your company’s situation. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or whether alternative solutions better suit your company’s problems - Formally engage with Wilson Field
If there is an appropriate insolvency solution, we will confirm the necessary steps to start the procedure and will issue you with the relevant documentation for you to formally engage us.
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