Singapore private club 1880 suddenly closes under layers of debt; founders accused of holidaying in the past month

[SINGAPORE] Private members’ club 1880 suddenly announced its permanent closure effective Tuesday (Jun 17), with its holding company 38 Degrees and operating company 1880 Pte Ltd placed into provisional liquidation. This follows the abrupt closure of its Hong Kong branch on May 30. It was also building a six-storey beachside hotel in Bali that never opened.

1880 was founded in 2017 by Canadian entrepreneur Marc Nicholson, and occupies 22,000 square feet of space on the third level of InterContinental Singapore Robertson Quay. It has a restaurant, bar, spa and co-working space.

A source told The Business Times that since Monday, a few club operators have stepped forward, offering to take over the local business. BT previously reported that at least two parties were looking into acquiring the club, one of which is said to be linked to a sovereign wealth fund.

“They see value in the operations of the Singapore business,” said the source. “These are large players in the food-and-beverage lifestyle businesses in Singapore and Asia. Some are existing regional clubs without a presence in Singapore.”

The source said the reason for the club’s abrupt closure here is due to mounting pressure on Nicholson from the different creditors and suppliers.

Staff and members left in the lurch

Following the shock closure, staff and suppliers have been heading to the club to collect their belongings and seek answers. There appeared to have been a meeting in the afternoon, from which staff emerged looking dejected.

BT was told that staff were particularly aggrieved as they claimed that Nicholson and his wife, Jean Low, 1880’s co-founder and chief executive officer, had been on holiday in the past month. The couple were said to have been vacationing by a lake in Canada, and after their return, headed to Bali. Meanwhile, staff were keeping the business going amid the financial troubles, but there was no communication about a potential closure. It was claimed that Nicholson put the club into liquidation upon returning from Bali.

BT has not been able to reach Nicholson or Low.

A wine supplier told BT that things were fine until around the middle of last year, when payments started getting delayed. “We heard that the funds in Singapore were going to Hong Kong, where they had cash-flow problems,” she said.

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Her company is owed about two months’ worth of payment, which is “not that bad”. “I heard some wine suppliers are owed five months or more in payment.”

BT understands that 1880 also owes some rent.

A member, who joined soon after the club’s founding about eight years ago, said she received an e-mail announcing the club’s closure at 1.44 am on Tuesday.

In it, Nicholson said the club and all its operations will cease immediately. “Please do not come to the premises as the doors will be locked,” he wrote.

“My bigger issue is that I run my business at the co-working space there; it’s my registered office address,” said the member who went to the club this morning to collect her mail. “I also use the club for meetings and entertainment. Now it’s a scramble to find a new registered address and divert all my mail.”

Calling it “really disappointing”, she said members could have been given a heads-up, especially those who run their businesses at 1880.

BT understands that there are more than 2,000 members in Singapore, and membership fees were reported to be around S$5,000, with monthly fees of S$245. Members were still getting weekly WhatsApp messages updating them on ongoing events for the rest of this week.

Ben Jones, co-founder of another private members’ club, Mandala Club, said he does not interpret 1880’s closure as a systemic industry warning. “Each club has its unique context,” he said. “At Mandala Club, we’re on a strong and profitable growth trajectory with exciting new developments in the pipeline both here in Singapore and overseas.”

Jones is also open to hiring 1880 staff. “We’ve engaged in productive conversations with several experienced professionals who have reached out.”

Out of funds

In his e-mail, Nicholson claimed that spend and frequency per visit of the club’s members have been trending down, and that the company needed an injection and “some efficiency optimisation”.

“We had three offers to invest in or acquire 1880. Any one of these would have restored us to health and given us a runway to building a global brand. I was extremely excited, believing in my heart that our future was secure and bright,” he wrote.

“We were, however, unsuccessful in getting those offers over the line. With no further funds to pay our staff or suppliers, we have no alternative but to close.”

He said details about the liquidation process and the creditors meeting “will be forthcoming” and apologised to Low, investor and Singapore club chairman Luke Jones, stakeholders, staff and members.

“I am an entrepreneur. I had an idea and I tried to make it work. We created a brand that earned a reputation that brought opportunities for expansion that I could not resist. Call it hubris, arrogance, capitalism or stupidity, I am solely to blame for the failure of 1880.”

A report by the South China Morning Post said that 1880 Hong Kong had about HK$20 million (S$3.3 million) of debt and owes wages to more than 100 staff. The club is also in rental arrears, having taken four storeys in Swire Properties’ Two Taikoo Place office complex in Quarry Bay.

1880 Hong Kong started operating in November last year. But unlike the Singapore version, part of it is open to the public.

In his e-mail to the Hong Kong members, Nicholson said 1880 Singapore will retain its brand and “continue under a new group”; and that the Hong Kong members will be granted a one-year overseas membership to the Singapore club, as well as all reciprocal clubs around the world.

Additional reporting by Bryan Cheong