The multimillion-dollar debt pile that sunk beauty salon The Gym has been revealed, with customers set to lose hundreds of thousands of dollars in unused gift vouchers amid revelations of a previous code of conduct breach by the company’s glamorous founder.
A list of creditors filed by liquidators reveals the beauty group owes close to $2.7m, including gift vouchers worth more than $426,000, and several finance companies – including Business Fuel Finance, Shift Finance Australia and Universal Finance – owed a combined total of close to $690,000.
Secured creditor NAB is owed $1.2m and employees have been left chasing close to $82,000 in unpaid entitlements.
Founder Beatriz “Bea” Masiero Vrettos called in liquidators to wind up the company on August 5 after a deal to sell the business fell through.
The former counsellor and psychotherapist established the business in 2019 – the same year she was banned from providing counselling or psychotherapy services in Victoria following an investigation by the state’s Health Complaints Commissioner.
According to prohibition orders published on the Health Complaints Commissioner’s website, the Commissioner found Ms Masiero Vrettos had breached Victoria’s code of conduct for health service providers by failing to provide services in a “safe and ethical way”, adding that counsellors and psychotherapists were “strictly prohibited from offering any service without the appropriate qualifications, from misinforming clients about the effectiveness of treatments, and from engaging in close personal relationship with clients”.
According to the prohibition orders, Ms Masiero Vrettos was initially handed a permanent ban in February 2019, but a later variation in September 2019 enabled her to provide counselling or psychotherapy services where they formed part of supervised, mandatory placement units required as part of her enrolment in an Australian College of Applied Psychology counselling course at the time.
Ms Masiero Vrettos declined to comment about the investigation on Tuesday, but said she was “absolutely devastated” by the collapse of The Gym.
“This was never something I could have seen coming, and winding down the businesses was never the intention. It’s heartbreaking that, despite our efforts, we couldn’t find a way forward,” she said.
“I was so excited about the potential sale and genuinely believed we had found a way to keep the businesses going, so having the potential buyers decide not to proceed was incredibly difficult.
“I’m now looking for a job, which is something I never imagined I’d be doing after running my own business. I’m looking at using everything I’ve learned to help small businesses avoid some of the mistakes I made.
“The impact of the wind down has been enormous. Our clients have lost through this, and I completely understand how devastating that is to them. And I am also devastated by this. As a result of the liquidation, I have lost my car and will lose my home and I’m facing bankruptcy.
“I poured my heart into building these businesses, and it’s heartbreaking to see everything come to an end.”
The winding up includes The Gym beauty and day spa clinic at Mile End, the Elara luxury day spa at Burnside Village, the Adelaide Beauty Academy and skincare line SkinRx.
Elara opened at Burnside Village 12 months ago with a VIP launch party where guests included Jess Head, wife of Aussie cricket superstar Travis Head, and former Plus One owner Eli Moulton.
Liquidator Stephen James from BCR Advisory confirmed the business’s assets, including treatment beds, hairdressing chairs and equipment, body sculpting machines and salon furniture, would be sold off in an auction on September 15.
The company’s assets are expected to raise just over $400,000 for creditors, leaving a shortfall of around $2.3m.