Singapore faces business closures on October 2, 2025. Two firms stand out in recent reports. Gong Cha, a bubble tea chain, has shut some outlets. Its website and social media accounts are down. This news comes from local sources. Readers can sign up for ST newsletters to get updates in their inbox.
Gong Cha’s shops show as closed on apps like GrabFood and foodpanda. Some spots might reopen between October 6 and December 31, based on GrabFood lists. The chain had already stopped work at places like Simei MRT station back in July. Its outlet at 100 AM mall also closed. These steps point to wider issues. In the UK, ST Group Food plans to end its loss-making unit, GCTea Outlets 2B, which runs Gong Cha. That news broke in July. Such moves highlight tough times for food and drink businesses. High costs and low sales pressure many chains to cut back or close.
Style Theory, an online rental site for clothes, has shut down too. It announced the end on September 30. The firm rented bags, clothes, and items from global brands. Now, it stops all services. Active users get no refunds for unused plan parts. The company heads to liquidation. Rising costs and lost investor support caused the fall. This case shows retail struggles. Renting apparel once seemed smart in a market with high prices. Yet, expenses outpaced gains.
These events tie to bigger problems in Singapore’s shops and food sectors. Costs keep climbing. Both firms cite them as key reasons for closure. For Gong Cha, rent and supplies add up fast in busy spots like malls. Style Theory faced similar hits from shipping fees and stock needs. Experts note that post-pandemic shifts hurt small players. Sales dipped while bills rose. In food, competition from local stalls grows stiff. For rentals, online rivals like buy-now-pay-later options pull customers away. What does this mean for workers? Jobs at these firms may vanish soon. Shoppers wonder about choices. Bubble tea fans seek other brands now. Rental seekers turn to second-hand apps. Overall, these closures signal a need for fresh ideas in tight markets.
Introduction: A Day of Reckoning
October 2, 2025, marks a significant inflection point in Singapore’s business landscape, with two prominent consumer brands—Gong Cha and Style Theory—announcing closures or significant operational disruptions. These developments, occurring simultaneously, reveal deeper structural challenges facing Singapore’s retail and F&B sectors and raise critical questions about the sustainability of consumer-focused businesses in one of Asia’s most expensive markets.
The Gong Cha Collapse: When Bubble Tea Goes Flat
The Sudden Shutdown
Gong Cha, once a ubiquitous presence in Singapore’s bubble tea landscape, has effectively gone dark. The brand’s Singapore social media accounts vanished overnight, its official website went offline, and multiple outlets across the island shut their doors. On delivery platforms like GrabFood and foodpanda, the brand’s shops display as “closed” or “unavailable”—a digital ghost town where once-thriving outlets served thousands of customers daily.
The shutdown appears coordinated and swift, suggesting this was not a gradual wind-down but rather an acute crisis. While some GrabFood listings show tentative reopening dates between October 6 and December 31, the complete communications blackout and simultaneous closure of multiple channels suggests a company in serious distress.
The British Connection
The roots of Gong Cha’s Singapore troubles extend to the United Kingdom. In July 2025, ST Group Food—the owner of GCTea Outlets 2B, Gong Cha’s operator—announced plans to liquidate its loss-making subsidiary. This international dimension reveals how Singapore’s F&B businesses are often caught in complex corporate structures where overseas parent companies’ financial troubles cascade down to local operations.
This isn’t merely a local franchise struggling with rent; it’s a systemic failure within a broader corporate ecosystem. The decision to liquidate in Britain likely triggered capital constraints that made continuing Singapore operations untenable.
Warning Signs Ignored
The signs were there for those paying attention. In July, Gong Cha quietly ceased operations at Simei MRT station. The 100 AM mall outlet closed without fanfare. These weren’t isolated incidents but harbingers of a broader collapse. Yet the speed of the final shutdown suggests that even company insiders may have been caught off-guard by the severity of the financial situation.
Style Theory: The Sharing Economy’s Singapore Casualty
The Death of Aspirational Access
Style Theory represented a particular Silicon Valley-influenced dream: democratizing luxury through the sharing economy. For a monthly subscription, Singaporeans could access designer bags and apparel they might never afford to own outright. It was Netflix, but for fashion—a compelling pitch that attracted backing from notable investors including Alpha JWC Ventures, Quest Ventures, The Paradise Group, and SoftBank Ventures Asia.
The platform’s September 30 closure marks not just a business failure but the collapse of a particular vision of consumer behavior. The announcement cited “rising operating costs and withdrawal of key investors”—a diplomatic way of saying the business model never achieved sustainability and investors lost faith.
The No-Refund Catastrophe
What makes Style Theory’s closure particularly troubling is its treatment of customers. Active subscribers will receive no refunds for unused portions of their memberships. Those holding rented apparel were told to simply keep the items “until further notice”—a surreal situation that effectively transfers company inventory to customers as unintended gifts. Bag renters must return items, as these are either company-owned or consigned by individual owners who are now creditors in a liquidation process.
Consignors—individuals who entrusted Style Theory with their designer items—face an even grimmer reality. They will not receive pending payouts and must instead file claims as unsecured creditors in liquidation proceedings, where they’ll likely recover pennies on the dollar, if anything at all.
This isn’t just bad business; it’s a breach of trust that will reverberate through Singapore’s startup ecosystem. How many consumers will think twice before prepaying for subscription services? How many consignors will hesitate before entrusting their property to platform businesses?
The Indonesia Precedent
Style Theory’s Singapore collapse follows its Indonesia operations shutdown in June 2025. The company framed that closure as “strategic repositioning” to focus on Singapore and Hong Kong with a “leaner team.” Three months later, Singapore operations shuttered entirely. This pattern suggests management either fundamentally misread market conditions or misled stakeholders about the severity of their situation.
The “leaner team” reference points to earlier troubles. In August 2020, The Business Times reported that Style Theory conducted “several waves of layoffs” affecting staff in Singapore and Indonesia. COVID-19 provided cover for these cuts, but the underlying issue was clear: the business model didn’t work even before the pandemic disrupted it.
The Structural Crisis: Why Singapore Is Eating Its Young
The Cost Disease
Both closures point to a common culprit: Singapore’s crushing operational costs. The city-state consistently ranks among the world’s most expensive places to do business. Rental costs in prime locations can consume 30-40% of revenue for retail businesses. Labor costs have risen steadily as the government tightened foreign worker policies. Utilities, logistics, and regulatory compliance add additional layers of expense.
For businesses operating on thin margins—bubble tea chains and fashion rental platforms alike—these costs leave virtually no room for error. A few months of underperformance can quickly become existential.
The Consumer Paradox
Singapore presents a unique consumer paradox. The population is wealthy by regional standards, with high disposable incomes and sophisticated tastes. Yet consumers are also famously price-sensitive, conditioned by decades of competitive market dynamics to expect value.
This creates a trap for premium or lifestyle businesses. Consumers want quality and experience but often aren’t willing to pay prices that would make such businesses sustainable given Singapore’s cost structure. Style Theory’s model depended on customers valuing access over ownership enough to pay recurring fees; clearly, not enough did.
Gong Cha faces similar pressures. Bubble tea occupies an awkward middle ground—too expensive to be an everyday indulgence for budget-conscious consumers, but too commoditized to command premium pricing. With dozens of competitors offering similar products, differentiation becomes nearly impossible.
The Investor Exodus
Style Theory’s explicit mention of “withdrawal of key investors” signals a broader shift in venture capital sentiment. The post-2021 funding environment has become dramatically more conservative. Investors who once celebrated “growth at all costs” now demand paths to profitability. Businesses that survived on repeated funding rounds find themselves cut off, forced to either become self-sustaining immediately or die.
This funding winter affects consumer businesses disproportionately. B2B software companies can often cut their way to profitability; consumer businesses with physical operations, inventory, and thin unit economics rarely can.
The Ripple Effects: Beyond Two Companies
Employment Impact
While neither company disclosed employee numbers, both closures represent sudden job losses in an already-challenging employment market. F&B and retail workers—often lower-wage employees with limited savings—face particular hardship from these abrupt shutdowns. Unlike gradual restructurings that allow for job searches and transitions, simultaneous closures leave workers scrambling.
The upstream employment impact extends further. Suppliers, landlords, and service providers who depended on these businesses face payment defaults and lost contracts. In Style Theory’s case, liquidation means these creditors will likely recover only a fraction of what they’re owed.
Consumer Confidence
Each high-profile business failure erodes consumer confidence in new business models and prepayment schemes. Why pay for an annual membership if the company might fold mid-year with no refunds? Why consign valuable items to a platform that could liquidate and leave you as an unsecured creditor?
This trust deficit disadvantages legitimate, well-run businesses alongside struggling ones. It creates a “lemons problem” where consumers can’t distinguish healthy companies from those on the brink, so they become cautious about all of them.
The F&B Reckoning
Gong Cha’s troubles arrive amid a broader F&B crisis in Singapore. The article mentions Prive Group recently shuttered all its restaurants. Other high-profile closures in 2024-2025 include numerous standalone restaurants, cafe chains, and food courts.
The F&B sector faces a perfect storm: rising costs, labor shortages, post-COVID debt burdens, and changing consumer behavior. Delivery platforms that seemed like saviors during lockdowns now extract 25-30% commissions that many restaurants can’t afford. The sector that once seemed recession-proof now looks increasingly precarious.
Real Estate Implications
Multiple retail closures create vacancy problems for landlords, particularly in suburban malls and HDB estates where outlets like Gong Cha at Simei MRT represented anchor tenants. These vacancies can create downward spirals—fewer shops mean fewer customers, which means remaining tenants struggle, leading to more closures.
While Singapore’s commercial real estate market remains robust overall, concentrated closures in certain segments could force rental adjustments that haven’t yet materialized.
The International Dimension: Singapore in Global Context
Regional Comparison
Singapore’s business closures occur against a backdrop of retail struggles across Southeast Asia. Rising e-commerce penetration, changing consumer preferences, and economic uncertainty affect the entire region. However, Singapore’s high cost structure makes it particularly vulnerable.
Businesses that thrive in Jakarta, Bangkok, or Manila—where costs are 40-60% lower—often struggle to replicate success in Singapore. This cost differential means Singapore increasingly serves as a showcase market rather than a profit center for regional chains.
The Gong Cha British Liquidation
The British parent company’s decision to liquidate Gong Cha operations reveals how international corporate structures can doom local businesses even when local operations might be viable. Singapore franchisees and customers had no input into decisions made in London boardrooms, yet suffer the consequences.
This pattern appears frequently in Singapore, where many consumer brands operate through complex international franchise or licensing arrangements. When overseas parent companies face financial stress, Singapore operations become expendable assets—liquidated to preserve core markets or satisfy creditors.
Policy Questions: What Can Singapore Do?
The Regulatory Response
Singapore’s government has historically taken a hands-off approach to business failures, viewing them as natural market outcomes. The Enterprise Singapore agency offers support programs for struggling businesses, but these tend to focus on restructuring viable companies rather than preventing failures.
Should the government do more? Arguments exist on both sides:
For intervention:
- Protecting employment and social stability
- Preserving competitive market structures
- Maintaining consumer confidence
- Supporting strategic sectors
Against intervention:
- Moral hazard of bailing out poorly-run businesses
- Distorting market signals
- Limited government resources
- Difficulty identifying which businesses deserve support
Consumer Protection Gaps
Style Theory’s no-refund policy highlights gaps in consumer protection for subscription services and platform businesses. Current regulations may not adequately address scenarios where:
- Prepaid services go undelivered due to business failure
- Platform businesses hold consumer or consignor property
- Subscription terms don’t account for company insolvency
Strengthening consumer protections might include mandatory insurance for businesses holding customer prepayments, clearer disclosure requirements about financial health, or faster refund processing when businesses announce closures.
The Cost Crisis
Addressing Singapore’s fundamental cost disease requires difficult policy choices:
Rental costs: Should the government intervene more aggressively in commercial real estate markets? Expand public retail space programs? Create more regulated rent structures?
Labor costs: How to balance fair wages for workers against business viability? Can technology and automation help bridge the gap?
Regulatory burden: Are compliance costs proportional to benefits? Can processes be streamlined without compromising standards?
These questions lack easy answers and involve fundamental trade-offs between different policy goals.
The Psychological Toll: Beyond Economics
The Entrepreneurial Chilling Effect
Each high-profile business failure discourages future entrepreneurs. Would-be business founders see Style Theory’s investor-backed pedigree and Gong Cha’s established brand offer no protection against sudden collapse. If these businesses couldn’t make it, what chance does a new entrant have?
This chilling effect particularly impacts young Singaporeans who might otherwise pursue entrepreneurship. The city-state’s culture already heavily favors stable employment over business risk-taking; visible failures reinforce this conservatism.
Consumer Anxiety
For consumers who lost money through Style Theory’s no-refunds policy or held membership plans with Gong Cha, these closures represent personal financial losses—perhaps not devastating individually, but accumulated across thousands of affected customers, they represent significant wealth destruction.
More broadly, each closure feeds anxiety about economic stability. Are these isolated incidents or harbingers of broader economic trouble? The concentration of closures in October 2025 will inevitably fuel speculation about systemic problems.
The Trust Deficit
Perhaps most damaging is the erosion of trust these closures create. Trust between consumers and businesses. Trust between entrepreneurs and investors. Trust between employees and employers. Trust between business tenants and landlords.
Rebuilding this trust takes years and requires consistent positive experiences that counteract negative ones. In the meantime, the trust deficit increases transaction costs throughout the economy as all parties become more cautious, demand more guarantees, and hesitate to commit.
Looking Forward: Scenarios for Singapore’s Business Landscape
The Optimistic Case
These closures represent healthy market corrections—elimination of unsustainable business models that should never have attracted investment in the first place. Better-run businesses will fill the gaps. Entrepreneurs will learn from these failures and build more resilient companies. The market becomes stronger through creative destruction.
In this view, Style Theory’s failure teaches valuable lessons about platform business models and unit economics. Gong Cha’s closure creates opportunities for bubble tea competitors to gain market share and for new F&B concepts to attract investment and customers.
The Pessimistic Case
These are early tremors of a broader crisis. Singapore’s cost structure has reached levels that make most consumer businesses unsustainable. More closures will follow. Investment in retail and F&B will dry up. The consumer economy will bifurcate into ultra-premium businesses serving wealthy customers and low-cost operations serving budget shoppers, with the middle market hollowing out.
Employment will shift toward larger corporate chains that can absorb losses, away from entrepreneurial ventures. Singapore’s business landscape becomes less diverse, less innovative, less interesting.
The Realistic Middle
The truth likely lies between extremes. Some sectors and business models will struggle; others will adapt and thrive. The key differentiators will be:
Unit economics: Businesses must achieve profitability per transaction, not rely on scale that may never arrive.
Capital efficiency: Operating with minimal external funding requirements, generating cash quickly.
Differentiation: Offering something genuinely unique that commands pricing power.
Operational excellence: Ruthlessly controlling costs while maintaining quality.
Adaptability: Quickly adjusting to market feedback and changing conditions.
Businesses possessing these characteristics will survive and grow. Those lacking them will continue failing, regardless of branding, investor backing, or initial traction.
Conclusion: The New Reality
The simultaneous closure of Gong Cha outlets and Style Theory’s complete shutdown represents more than two business failures. These events illuminate fundamental challenges facing Singapore’s consumer economy: unsustainable cost structures, unrealistic investor expectations, challenging unit economics, and consumer behavior that doesn’t support premium pricing.
For entrepreneurs, the message is sobering: even established brands and venture backing offer no guarantee of success. Survival requires exceptional execution, favorable unit economics, and perhaps some luck.
For consumers, these closures serve as reminders about the risks of prepayment and the ephemeral nature of access-based business models.
For policymakers, the concentration of failures demands attention to structural issues: Are Singapore’s costs pricing out viable businesses? Do regulations adequately protect consumers? Is the ecosystem supporting entrepreneurship or inadvertently crushing it?
October 2, 2025, may be remembered as the day Singapore’s business community confronted some uncomfortable truths about economic sustainability in one of the world’s most expensive cities. How stakeholders respond to these truths will shape the city-state’s economic future for years to come.
The bubble has burst—both literally for Gong Cha’s tapioca pearls and metaphorically for assumptions about easy profits in consumer businesses. What emerges from this reckoning will determine whether Singapore remains a vibrant hub for entrepreneurship or becomes a cautionary tale of costs overwhelming opportunity.
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