The abrupt closure of Twelve Cupcakes on October 29, 2025, marks another significant casualty in Singapore’s increasingly challenging food and beverage landscape. What began as a celebrity-backed success story in 2011 ended in provisional liquidation, leaving 80 workers without jobs and raising serious questions about corporate responsibility, labor practices, and the sustainability of retail food businesses in Singapore’s evolving economy.
The Sudden Collapse: A Timeline of Crisis
The Final Days
The closure of Twelve Cupcakes exemplifies corporate failure at its most disruptive. On October 29, 2025, the company was placed under provisional liquidation—a legal process typically reserved for companies facing insurmountable financial distress. By October 30, the closure notice appeared on the company’s website and Instagram page at 4:20 PM, marking the official end of operations across all 20 outlets in Singapore.
What makes this closure particularly alarming is its speed and lack of transparency. Field visits by The Straits Times revealed varying states of abandonment: some outlets still had furnishings and signage intact, suggesting operations ceased with little warning. At Bukit Panjang Plaza, the store was reportedly open on October 29—just one day before the public announcement. At Nex shopping mall, hoarding was already up, with the outlet having closed a week earlier on October 23, suggesting a staggered shutdown that may have caught even some employees by surprise.
The Union Blindside
Perhaps most troubling was the company’s failure to notify the Food, Drinks and Allied Workers Union (FDAWU) in advance, despite being a unionized workplace. The union learned of the closure on the same day it was announced to workers—October 29—representing a fundamental breach of labor partnership principles.
FDAWU General Secretary Sankaradass S. Chami’s response was unequivocal in its condemnation: the closure “was not only irresponsible, but also lacked due process.” This isn’t merely bureaucratic complaint—it reflects a serious failure in corporate governance that left 80 workers with no time to prepare for unemployment, secure alternative positions, or arrange their financial affairs.
Financial Autopsy: The Numbers Behind the Fall
A Business in Freefall
The financial trajectory of Twelve Cupcakes reveals a business in accelerating decline, not sudden collapse. Documents filed with the Accounting and Corporate Regulatory Authority paint a picture of sustained hemorrhaging:
Revenue Collapse (FY2021 to FY2025)
- FY2021: $15.32 million
- FY2025: $9.25 million
- Decline: 40% over four years
Mounting Losses
- Net loss for FY2025: $1.23 million
- This represents a loss of approximately 13.3% on revenue—an unsustainable margin for any retail food operation
Balance Sheet Deterioration
- Total assets fell from $7.98 million (FY2021) to $5.02 million (FY2025)
- Total liabilities declined from $6.1 million to $4.14 million
- While debt reduction might seem positive, the simultaneous asset decline suggests asset liquidation or write-downs rather than genuine financial improvement
What the Numbers Reveal
The 40% revenue decline over four years is catastrophic for a retail chain. Averaged out, this represents approximately 10% annual revenue erosion—a death spiral for any business operating on retail food margins, which typically range from 3-8% net profit in normal circumstances.
The $1.23 million net loss on $9.25 million revenue suggests the company was burning through approximately $100,000 per month. With 20 outlets, this means each location was generating insufficient margin to cover its operating costs, even before corporate overhead.
The deteriorating asset base—from $7.98 million to $5.02 million—likely reflects a combination of factors: equipment depreciation, inventory write-downs, and possibly the closure of underperforming locations even before the final shutdown.
The Structural Challenges: Why Twelve Cupcakes Failed
1. The Premium Cupcake Market Mirage
Twelve Cupcakes entered the market in 2011 during the premium cupcake boom, riding a global trend popularized by shows like “Cupcake Wars” and “DC Cupcakes.” The business model relied on consumers willing to pay premium prices ($3-5+ per cupcake) for artisanal, decorated cupcakes as both everyday treats and special occasion items.
This market proved fundamentally unstable in Singapore for several reasons:
Lack of Differentiation: As competitors emerged—from bakeries to supermarkets offering similar products—Twelve Cupcakes struggled to maintain its premium positioning. The cupcake itself is not a complex product requiring specialized skill, making it easy for competitors to replicate.
Occasion-Based Demand: Unlike daily coffee or meals, cupcakes are largely discretionary, occasion-based purchases. This creates lumpy revenue streams concentrated around celebrations, making consistent foot traffic and revenue prediction challenging.
Health Consciousness Trend: Singapore’s growing health consciousness and government-led initiatives like the “war on diabetes” have made indulgent, sugar-heavy treats less appealing. The premium cupcake concept runs counter to prevailing health trends.
2. Retail Real Estate Economics
Operating 20 retail outlets in Singapore represents an enormous fixed cost burden. Singapore has some of the world’s highest retail rents, with prime mall locations commanding $30-50+ per square foot monthly. For a cupcake shop, this might translate to:
- Monthly rent: $8,000-15,000+ per outlet (depending on location)
- Annual rent burden: $1.92-3.6 million for 20 outlets
- This represents 21-39% of the company’s FY2025 revenue going to rent alone
When revenue falls 40%, these fixed costs become crushing. Unlike food delivery businesses that can scale down quickly, retail leases lock operators into long-term commitments that cannot be easily escaped.
3. Labor Economics and Past Violations
Twelve Cupcakes’ history of labor violations reveals a company perpetually struggling with cost management:
2020-2021 Violations (Founders)
- Jaime Teo and Daniel Ong were charged with underpaying foreign employees between 2013-2016
- 24 charges each involving eight employees
- Each fined $65,000 in 2021
2021 Violations (Current Management)
- Dhunseri Group management fined $119,500 in January 2021
- Underpaid seven foreign employees
- One worker received only half their owed wages at times
These weren’t administrative oversights—they represented systemic attempts to reduce labor costs below legal minimums. This pattern suggests a business model that was unprofitable even when violating labor laws, raising questions about whether it could ever be viable operating legally and ethically.
4. Ownership Transition Challenges
The 2016 sale to Dhunseri Group represents a critical inflection point. When foreign entities acquire local retail brands, several challenges emerge:
Cultural Distance: Dhunseri Group, primarily a tea company based in Kolkata, likely lacked deep understanding of Singapore’s F&B market nuances, consumer preferences, and operational challenges.
Management Continuity: The divorce announcement of the founders coinciding with the sale suggests potential operational disruption during the ownership transition.
Strategic Misalignment: The labor violations under new management suggest cost-cutting took precedence over brand building or strategic repositioning—a common symptom of financial distress.
5. COVID-19 and Structural Market Changes
While not explicitly mentioned in the timeline, the 2020-2023 period would have been catastrophic for a mall-based retail bakery chain:
- Extended periods of reduced foot traffic in malls
- Work-from-home reducing office area patronage
- Reduced celebration gathering sizes limiting party orders
- Accelerated shift to online food delivery (where cupcakes are challenging products)
- Consumer spending shifting to essentials
The 40% revenue decline from FY2021 to FY2025 likely reflects permanent market changes rather than cyclical downturns.
The Human Cost: Singapore’s Gig-ifying Economy
Immediate Impact on Workers
The 80 affected employees face several challenges:
Financial Insecurity
- Uncertain salary payments for final month(s) worked
- Potential loss of accumulated leave payouts
- Severance packages likely minimal or non-existent given liquidation status
- CPF contributions may be in arrears
Employment Gap Concerns
- Singapore’s F&B sector is contracting, not expanding, limiting reabsorption opportunities
- October-November timing particularly challenging (post-major hiring season)
- Sudden termination creates gaps in employment history that require explanation
- Foreign workers face visa cancellation and repatriation pressures
Psychological Impact
- Breach of trust from employer’s lack of transparency
- Stress of sudden job loss without preparation time
- Uncertainty about references from a liquidated company
The Broader F&B Employment Crisis
Twelve Cupcakes joins a growing list of Singapore F&B closures:
- Prive Group: Shut all restaurants
- Gong Cha: Ceased Singapore operations, closed all stores
- Numerous smaller chains and independent operators
This pattern reveals a structural crisis in Singapore’s F&B employment sector:
Job Insecurity: F&B positions, once considered stable service-sector employment, are increasingly precarious as businesses struggle with high costs and changing consumer behavior.
Wage Stagnation: The industry’s financial pressures (evidenced by Twelve Cupcakes’ labor violations) suggest wages are compressed, making positions less attractive.
Skills Transferability: Workers from specialized retail food operations may struggle to transition to other sectors without retraining.
The Union’s Response: Power and Limitations
FDAWU’s strong condemnation highlights both the importance and limitations of union representation in Singapore:
What Unions Can Do
- Assist with salary claims through preferential creditor status in liquidation
- Provide job placement support and career counseling
- Advocate for better corporate practices
- Ensure collective agreement benefits are considered in liquidation proceedings
What Unions Cannot Prevent
- Business failures driven by market forces
- Sudden closures when companies hit financial crisis points
- Job losses in contracting industries
- Outcomes when businesses have insufficient assets to meet obligations
The fact that even a unionized company could close without advance notice to the union reveals limitations in Singapore’s labor protection framework when companies face insolvency.
Singapore’s F&B Crisis: Systemic Issues
The Perfect Storm
Multiple factors are converging to create an existential crisis for traditional retail F&B in Singapore:
1. Cost Structure Imbalance
- Rent: Among world’s highest, and landlords have been slow to adjust to new retail realities
- Labor: Minimum wage (introduced 2022) and fair employment standards increase costs, though absolutely necessary for worker welfare
- Ingredients: Import-dependent Singapore faces global inflation pressures
- Utilities: Rising energy costs impact both production and refrigeration-heavy operations
2. Revenue Constraints
- Consumer spending on discretionary food items under pressure from inflation and cost-of-living concerns
- Competition from home baking (accelerated during COVID-19)
- Delivery platform commission fees (30-35%) make online expansion unprofitable for low-margin items
- Changing consumer preferences toward healthier, less indulgent options
3. Market Saturation
- Singapore’s F&B density is extremely high relative to population
- Mall-based retail facing structural decline as e-commerce rises
- Too many similar concepts chasing limited consumer spending
Why the Traditional Model Is Breaking
The retail food business model that worked for decades is fundamentally broken in Singapore’s current environment:
Old Model
- High foot traffic in malls = consistent customer flow
- Premium products justify high margins
- Economies of scale across multiple outlets
- Brand strength drives pricing power
New Reality
- Declining mall traffic; consumers shop more purposefully
- Premium pricing resistance; consumers compare prices instantly online
- Fixed costs of multiple outlets become liabilities when revenue fluctuates
- Brand loyalty erodes quickly in crowded market with low switching costs
The Policy Questions
Twelve Cupcakes’ collapse raises policy considerations:
Labor Protection Should Singapore require:
- Longer advance notice periods before closures (beyond current Employment Act requirements)?
- Mandatory employer contributions to worker transition funds?
- Stronger penalties for closing without union consultation?
Business Sustainability How can Singapore support F&B businesses while maintaining:
- Fair wages and working conditions?
- Affordable commercial rents that allow viable business models?
- Food safety and quality standards?
Foreign Ownership Should acquisition of local brands by foreign entities trigger:
- Performance bonds to protect workers?
- Ongoing oversight of labor practices?
- Strategic review requirements?
Lessons for Singapore’s Business Community
For Business Owners
1. The Scale Trap Twelve Cupcakes’ 20-outlet network represents a cautionary tale. Rapid expansion creates enormous fixed costs that become existential threats when revenue declines. Many successful Singapore F&B operations maintain 3-8 outlets, allowing quality control and manageable overhead.
2. Trend vs. Sustainability Building a business on a trend (premium cupcakes) rather than fundamental consumer need creates vulnerability. Successful long-term F&B operations typically focus on:
- Daily consumption categories (coffee, meals)
- Cultural food staples with deep roots
- Value propositions beyond novelty
3. Cost Management vs. Legal Compliance The labor violations reveal a fundamental misunderstanding: breaking labor laws to reduce costs is not a business strategy—it’s a business failure. Companies that cannot operate profitably while paying legal wages have broken business models that require fixing or closing, not illegal cost-cutting.
For Workers
1. Union Membership Matters While unions couldn’t prevent this closure, FDAWU members will receive:
- Priority assistance with claims
- Job placement support
- Advocacy in liquidation proceedings
Non-unionized workers in similar situations often face these processes alone.
2. Industry Selection Considerations Singapore’s F&B sector is undergoing structural change. Workers should consider:
- Financial stability of employers (public financial disclosures for larger companies)
- Industry trends and competitive positioning
- Diversification of skills beyond single-employer or single-industry focus
3. Emergency Preparedness This closure demonstrates why financial advisors recommend 3-6 months emergency funds—sudden job loss can happen to anyone in any industry.
For Investors and Potential Buyers
1. Celebrity Backing Means Nothing The founders’ fame provided initial marketing advantage but couldn’t overcome fundamental business model weaknesses. Due diligence must focus on unit economics and competitive positioning, not founder profiles.
2. Cross-Border Acquisitions Require Local Expertise Dhunseri Group’s acquisition suggests insufficient understanding of local market dynamics. Foreign investors need either:
- Deep local market knowledge before acquiring
- Strong local management with decision-making authority
- Realistic assessment of whether they can add value beyond capital
3. Turnaround vs. Decline The financial data shows steady decline over four years—this was a business in terminal decline, not temporary difficulty. Investors must recognize the difference and know when to cut losses rather than continuing to pour resources into failing operations.
The Path Forward: What Happens Next
For Affected Workers
Immediate Steps
- Register with FDAWU for member support services
- File employment claims for unpaid wages, leave, and other benefits
- Update resumes and begin job search immediately
- Consider MOM’s Workforce Singapore (WSG) career services
- Foreign workers should clarify visa status and options with MOM
Creditor Hierarchy in Liquidation Workers have preferential creditor status in Singapore liquidations, ranking ahead of unsecured creditors but behind secured creditors and liquidation costs. However, with assets of only $5.02 million and liabilities of $4.14 million, full recovery is uncertain.
For the F&B Industry
Adaptation Strategies Surviving F&B operators must:
- Right-size operations: Fewer, more profitable locations rather than expansive networks
- Diversify revenue: Catering, corporate contracts, online presence beyond delivery platforms
- Focus on unit economics: Each location must be independently profitable
- Build genuine differentiation: Beyond novelty or trends, create sustainable competitive advantages
- Embrace flexibility: Shorter leases, pop-up concepts, lower fixed cost structures
The Shakeout Continues Singapore’s F&B industry is experiencing necessary consolidation. Over-expansion during good times (2010-2019) created overcapacity that current market conditions cannot support. More closures will likely follow before the industry reaches a sustainable equilibrium.
Conclusion: Beyond One Company’s Failure
The closure of Twelve Cupcakes transcends a single business failure—it represents a case study in multiple systemic challenges facing Singapore:
Economic Transition: Singapore is moving from a model based on high consumer spending and mall-centric retail to something different, but the transition creates casualties.
Labor Market Evolution: The tension between fair employment practices and business viability remains unresolved. Companies that operated by violating labor laws are being forced to close, but this creates short-term pain for workers even as it represents long-term progress.
Corporate Responsibility: The lack of advance notice to workers and the union represents a failure of corporate governance that regulations may need to address.
Social Safety Net: Workers’ vulnerability to sudden job loss highlights questions about adequacy of unemployment support and retraining systems.
For the 80 workers affected, these broader issues matter less than the immediate challenge of finding new employment and recovering owed wages. Their experience serves as reminder that behind every business closure are human beings whose lives are disrupted through no fault of their own.”
The story of Twelve Cupcakes—from celebrity-backed startup to provisional liquidation—will be studied as a cautionary tale. It demonstrates that success requires more than initial buzz, that sustainable businesses must be built on sound economics rather than trends, and that corporate responsibility to workers must extend through good times and bad.
Singapore’s F&B landscape is being permanently reshaped. The businesses that survive will be those that adapt to new realities: higher costs, more demanding consumers, digital integration, and the necessity of treating workers fairly while maintaining profitability. It’s a challenging balance, but the alternative—the path Twelve Cupcakes followed—leads only to closure, liquidation, and the human cost of sudden unemployment.
Note: This analysis is based on publicly available information as of October 30, 2025. The liquidation process is ongoing, and additional details may emerge regarding the company’s financial situation and impact on workers.
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.
Maxthon
In an age where the digital world is in constant flux and our interactions online are ever-evolving, the importance of prioritizing individuals as they navigate the expansive internet cannot be overstated. The myriad of elements that shape our online experiences calls for a thoughtful approach to selecting web browsers—one that places a premium on security and user privacy. Amidst the multitude of browsers vying for users’ loyalty, Maxthon emerges as a standout choice, providing a trustworthy solution to these pressing concerns, all without any cost to the user.
Maxthon, with its advanced features, boasts a comprehensive suite of built-in tools designed to enhance your online privacy. Among these tools are a highly effective ad blocker and a range of anti-tracking mechanisms, each meticulously crafted to fortify your digital sanctuary. This browser has carved out a niche for itself, particularly with its seamless compatibility with Windows 11, further solidifying its reputation in an increasingly competitive market.
In a crowded landscape of web browsers, Maxthon has forged a distinct identity through its unwavering dedication to offering a secure and private browsing experience. Fully aware of the myriad threats lurking in the vast expanse of cyberspace, Maxthon works tirelessly to safeguard your personal information. Utilizing state-of-the-art encryption technology, it ensures that your sensitive data remains protected and confidential throughout your online adventures.
What truly sets Maxthon apart is its commitment to enhancing user privacy during every moment spent online. Each feature of this browser has been meticulously designed with the user’s privacy in mind. Its powerful ad-blocking capabilities work diligently to eliminate unwanted advertisements, while its comprehensive anti-tracking measures effectively reduce the presence of invasive scripts that could disrupt your browsing enjoyment. As a result, users can traverse the web with newfound confidence and safety.
Moreover, Maxthon’s incognito mode provides an extra layer of security, granting users enhanced anonymity while engaging in their online pursuits. This specialized mode not only conceals your browsing habits but also ensures that your digital footprint remains minimal, allowing for an unobtrusive and liberating internet experience. With Maxthon as your ally in the digital realm, you can explore the vastness of the internet with peace of mind, knowing that your privacy is being prioritized every step of the way.