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F45 founder sells home amid class action investigations after stock market plunge

F45 founder sells home amid class action investigations after stock market plunge

A struggling Australian fitness franchise that has been savaged on the stock markets is now facing not one, but five potential lawsuits.

F45 Training Holdings Inc, known for its high intensity interval training (HIIT) classes, was at first an Australian success story after hitting the New York Stock Exchange in July last year and raking in $500 million on the first day.

But two weeks ago things drastically changed; the company’s founder and CEO Adam Gilchrist stepped down while 110 employees were laid off and expansion plans were slashed significantly.

Stock prices plunged off the back of the news and dipped to 62 per cent of its original price at its lowest, when it sank to $US1.35 ($A1.90) on July 27.

At time of writing, according to MarketWatch, F45 stock was trading at $US2.15 ($A3) compared to its listing price of $US16 ($A22.50) just a year earlier.

Now five heavyweight class action law firms from the US are calling for investors to come forward to explore the possibility of filing a class action.

The firms are investigating whether F45 misrepresented itself to investors and the most recent legal firm only announced it was investigating the company on Friday.

In July last year at its initial public offering, F45 sold 18.75 million shares of stock priced at $US16.00 per share.

It had a stunning $US1.46 billion ($A2 billion) market capitalization however that has since slipped to $US183.6 million ($A258.60).

In May, F45 thought it had secured a $US250 million ($A350 million) line of credit to keep rapidly expanding but by the next investor’s meeting in July, this had failed through.

But during the July trading update, investors learned that credit line would not be available.

After planning to roll out 1500 new franchises this year F45 will instead aim for between 350 and 450 and its forecasted revenue has dropped from $US275 million ($A387 million) to $US130 million ($A182 million).

F45 fitness founder and CEO Adam Gilchrist – not to be confused with the cricket player of the same name – reportedly immediately listed his house on the market after the downfall.

Coincidentally, the same weekend that another law firm announced it was investigating the possibility of a class action, Mr Gilchrist successfully sold his $A14 million Sydney home.

Mr Gilchrist and Rob Deutsch founded the company in 2013 in the Sydney suburb of Paddington but Mr Deutsch left in February 2020 and said he was devastated to hear what had happened since then.

“Never in my wildest dreams could I have imagined this,” Mr Deutsch wrote on Instagram after the shock news of the lay-offs. “When I exited, and sold out of F45, I left a healthy, phenomenal, beast of a business. All the way from the company culture to the heart beat of the business… The workouts. F45 was special.

“I genuinely hope all of the 110 laid-off staff, find happiness and opportunities elsewhere.”

News.com.au has contacted F45 for comment.

On Friday, US law firm Labaton Sucharow called for investors to get in touch, the latest in a string of legal firms circling F45 like sharks.

Prior to that, Schall Law Firm, a US shareholder rights litigation firm, announced last Tuesday that it was investigating F45 “for violations of the securities laws”.

Then there was Bragar Eagle & Squire, PC, another shareholder rights specialist, which started its own investigation a day later.

Bragar Eagel & Squire stated the company’s revenue was “down significantly” compared to what was previously promised to investors.

James Wilson of Faruqi & Faruqi also called for investors who have “suffered losses exceeding $US50,000 ($A70,450) investing in F45 Training stock or options”.

Portnoy Law Firm also weighed in, saying it was investigating “possible securities fraud” and that it would provide a “complimentary case evaluation and discuss investors’ options for pursuing claims to recover their losses”.

Embattled CEO sells home

Mr Gilchrist reportedly listed his Sydney mansion, located in Freshwater in the city’s northern beaches region, on the market following his company’s stock crash.

Over the weekend, it’s understood to be have been sold.

The Sydney Morning Herald reported that strict gag orders prevented the real estate agents from disclosing its final price.

However, they did confirm it sold for more than he bought it for in 2019, which was $14 million.

Realestate.com.au reported that it sold more than $1 million over the reserve.

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Categories
Business

Rental crisis: employer’s shock at real estate agent’s questions

Rental crisis: employer's shock at real estate agent's questions

Support has piled on for an employer who called out real estate agents who asked “invasive” questions about one of his employees, prompting other Aussies to share their own horror stories and distrust for the industry.

Taking to Twitter, Victorian Trades Hall Council secretary Luke Hilakari shared his dismay at being asked questions about his employee that he said had no relevance to applying for a rental property.

“I was a reference for an employee & the agent asked q’s like: Total salary, do they come to work on time, are they hard working,” he shared.

“These q’s are none of the agents business & no boss should have the power to spike where u live.”

Now, others on Twitter are sharing their own experiences, and backing up Mr Hilakari’s stance.

“Have you had many girlfriends? Would you trust him with your kids? Does he like to go out late?” answer one. “True questions recently asked to my reference when applying for a rental. Get in the bin.”

“I’ve done one of these too, but even worse,” replied another employer. “It’s stupid. Even if the employee is seconds away from being fired, there is no incentive and a lot of risk for a manager to write anything remotely meaningful. I cannot discuss an employee’s performance with a real estate agent.”

Another was quick to speculate it was likely the real estate agent had taken it upon themselves to ask the questions, and questioned if landlords even knew this was happening: “This is total power tripping and I bet the landlord has no idea it’s even happening and isn’t given that info.”

“That’s 100% correct. Real estate agents think that they are a law unto themselves. They are the root of the housing crisis, as well as developers riding roughshod over homebuyers and governments,” agreed another.

Although most were firmly against the apparently not uncommon line of questioning, not everyone supported renters, with one Twitter user replying that these were fair questions to ask.

“Of course they’re relevant questions. If they don’t make enough money then they may not be able to afford the rent. If they don’t come to work on time then they might not pay their rent on time. If they are not hard working then they may not look after the rental property,” they said.

“Sorry to burst the bubble but these kind of things add up to someone who is probably responsible and would probably reliably pay their rent on time,” said another.

While some argued that seeking to find out what type of person an agent might be allowing to rent a property is fair, others pointed out that those looking to buy weren’t held to the same standard.

“I recently got a mortgage and they didn’t call my employer,” a Twitter user commented. “Pay slips/bank statements were enough. Renters are being scrutinized to a greater degree for a much shorter term/less beneficial to them financial commitment.”

We all know that the process of applying for an overpriced rental is competitive, invasive and absolutely stacked in the landlord’s favor — just look at the reaction one potential tenant got when he asked for something as simple as a reference for the landlord.

Now, Mr Hilakari says changes to the Victoria’s Residential Tenancies Act are needed to regulate the types of questions real estates can ask.

Speaking to news.com.au, Mr Hilakari further explained that he was concerned with invasive questions like this were not only getting worse, but unfairly gave an employer too much power of their employees’ life.

“We’ve received reference checks for rentals before for and the questions being asked are getting much more invasive,” he said.

“As the rental market has tightened, it seems real estate agents think they have the unfettered right to ask whatever they want.

“Employers are put in the terrible situation of either having to give personal information or risk their employee missing out on a house to live in.

“I’ve had both employers and renters reach out and say they have universally had a gut full. Renters feel completely put over a barrel and feel they have no choice but to share their personal data.

“The system has to change.”

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Categories
Australia

Rental crisis: employer’s shock at real estate agent’s questions

Rental crisis: employer's shock at real estate agent's questions

Support has piled on for an employer who called out real estate agents who asked “invasive” questions about one of his employees, prompting other Aussies to share their own horror stories and distrust for the industry.

Taking to Twitter, Victorian Trades Hall Council secretary Luke Hilakari shared his dismay at being asked questions about his employee that he said had no relevance to applying for a rental property.

“I was a reference for an employee & the agent asked q’s like: Total salary, do they come to work on time, are they hard working,” he shared.

“These q’s are none of the agents business & no boss should have the power to spike where u live.”

Now, others on Twitter are sharing their own experiences, and backing up Mr Hilakari’s stance.

“Have you had many girlfriends? Would you trust him with your kids? Does he like to go out late?” answer one. “True questions recently asked to my reference when applying for a rental. Get in the bin.”

“I’ve done one of these too, but even worse,” replied another employer. “It’s stupid. Even if the employee is seconds away from being fired, there is no incentive and a lot of risk for a manager to write anything remotely meaningful. I cannot discuss an employee’s performance with a real estate agent.”

Another was quick to speculate it was likely the real estate agent had taken it upon themselves to ask the questions, and questioned if landlords even knew this was happening: “This is total power tripping and I bet the landlord has no idea it’s even happening and isn’t given that info.”

“That’s 100% correct. Real estate agents think that they are a law unto themselves. They are the root of the housing crisis, as well as developers riding roughshod over homebuyers and governments,” agreed another.

Although most were firmly against the apparently not uncommon line of questioning, not everyone supported renters, with one Twitter user replying that these were fair questions to ask.

“Of course they’re relevant questions. If they don’t make enough money then they may not be able to afford the rent. If they don’t come to work on time then they might not pay their rent on time. If they are not hard working then they may not look after the rental property,” they said.

“Sorry to burst the bubble but these kind of things add up to someone who is probably responsible and would probably reliably pay their rent on time,” said another.

While some argued that seeking to find out what type of person an agent might be allowing to rent a property is fair, others pointed out that those looking to buy weren’t held to the same standard.

“I recently got a mortgage and they didn’t call my employer,” a Twitter user commented. “Pay slips/bank statements were enough. Renters are being scrutinized to a greater degree for a much shorter term/less beneficial to them financial commitment.”

We all know that the process of applying for an overpriced rental is competitive, invasive and absolutely stacked in the landlord’s favor — just look at the reaction one potential tenant got when he asked for something as simple as a reference for the landlord.

Now, Mr Hilakari says changes to the Victoria’s Residential Tenancies Act are needed to regulate the types of questions real estates can ask.

Speaking to news.com.au, Mr Hilakari further explained that he was concerned with invasive questions like this were not only getting worse, but unfairly gave an employer too much power of their employees’ life.

“We’ve received reference checks for rentals before for and the questions being asked are getting much more invasive,” he said.

“As the rental market has tightened, it seems real estate agents think they have the unfettered right to ask whatever they want.

“Employers are put in the terrible situation of either having to give personal information or risk their employee missing out on a house to live in.

“I’ve had both employers and renters reach out and say they have universally had a gut full. Renters feel completely put over a barrel and feel they have no choice but to share their personal data.

“The system has to change.”

.

Categories
Business

F45 co-founder Adam Gilchrist selling Freshwater, Sydney manor after stock market collapse

F45 co-founder Adam Gilchrist selling Freshwater, Sydney manor after stock market collapse

The picturesque Sydney beachside manor owned by F45 co-founder Adam Gilchrist is set to go under the hammer after the Australian fitness giant’s stunning downfall.

Mr Gilchrist (not the cricketer), who stepped down as F45’s chief executive last week amid stock plunges and company-wide lay-offs, is selling his “beachfront trophy home” at Freshwater on Sydney’s northern beaches.

The home, 52 Ocean View Rd, grew into infamy in 2018 when Mr Gilchrist and his wife Eli bought the property for a whopping $14m due to a minor neighborly dispute.

The couple had purchased a three-bedroom cottage on 50 Ocean View Rd for $5.4m in 2017 and planned to spend $2.5m to develop the property.

But neighbors complained it would not comply with building height or boundary controls, which led to Mr Gilchrist taking the extraordinary step of withdrawing his proposal and setting the matter by buying his neighbour’s bigger home for the obscene amount.

The $14m price was a record for the Freshwater suburb, with agents considering 52 Ocean View Rd’s mammoth coming out an outlier price.

But the three-storey home is again on the market, with real estate agents billing it as “unquestionably one of the finest homes and locations in Sydney”.

“Cutting-edge architectural design and an unsurpassed beachfront setting combine in this state-of-the-art luxury residence to deliver the ultimate designer beach house,” a description of the home reads.

“Set to a picture-perfect backdrop that sweeps over the surf to the ocean’s horizon and North Head, the tri-level residence showcases living spaces and lift access to all three levels and has been appointed and furnished with every conceivable luxury.”

The home’s features include five bedrooms, three bathrooms and giant retractable windows in the dining room.

Mr Gilchrist suddenly announced last week that he was stepping down as F45’s chief executive after co-founding the business with Rob Deutsch back in 2013.

The company also revealed it would be laying off 110 staff and cuttings its operational expenses, which caused its stock price to fall by more than 60 per cent.

F45 hoped that by reducing its corporate workforce by 45 per cent it could return to a positive cash flow.

Mr Gilchrist said he would be “forever grateful” as he exited the company.

“To the staff that have worked tirelessly since our inception, you have been incredible in your efforts, and I thank you for all of your support,” Mr Gilchrist said in a statement.

“To the investors that have joined us along our journey, I thank you for your commitment to F45.

“Lastly, I am forever grateful to our franchisees who deliver the world’s best workout each day to F45 members around the world.”

Mr Deutsch, who stepped down as chief executive and sold his shares in the company in 2020, said there were “enormous issues needing fixing”.

“Never in my wildest dreams could I have imagined this,” he wrote on Instagram.

“When I exited, and sold out of F45, I left a healthy, phenomenal, beast of a business. All the way from the company culture to the heart beat of the business… the workouts. F45 was special.

“I genuinely hope all of the 110 laid-off staff, find happiness and opportunities elsewhere.”

F45 was a global fitness powerhouse before its stock shock last week, with more than 1500 studios in 45 countries and Hollywood superstar Mark Wahlberg among its investors.

Mr Gilchrist made $500m overnight when the company went public on the New York Stock Exchange in July last year.

His northern Sydney home will be up for auction on August 27.

Read related topics:sydney

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