After a drive-by shooting and complaints of parking chaos, few fitness chains have become as controversial in Melbourne as Derrimut 24:7 Gym. The bodybuilders’ paradise that began in the city’s west has been rapidly expanding through the suburbs, frustrating neighbours in its path and now falling foul of the federal tax office.
The gym giant is locked in a legal dispute over a $14.61 million tax debt, with the company’s owner now being personally pursued over unpaid taxes and staff superannuation.
Derrimut 24:7 Gym owner Nikolaos Solomos inside the Port Melbourne centre.Credit: Eddie Jim
Derrimut’s fight with the Australian Tax Office comes as insiders reveal the company has been planning to open its first CBD site at the former Bourke Street location of fitness centre Virgin Active, which closed last year.
The Derrimut chain, which now has 27 gyms across Victoria and South Australia, is known for its enormous facilities, with memberships costing as little as $5 a week. It opened a 4000-square-metre Port Melbourne gym in late 2024.
Derrimut lodged an application with the Federal Court in April to challenge a decision by the Tax Commissioner to reject the company’s request to pay its $14.61 million debt in instalments.
Court documents show Derrimut disputes the commissioner’s findings that its cashflow projections didn’t support its suggested payment plan and that the total equity of properties it was proposing to provide as security was unclear.
Part of the expansive gym floor at a transformed Port Melbourne warehouse. Credit: Eddie Jim
The tax office then filed a claim in June at the County Court to sue Derrimut’s founder, Nikolaos Solomos, to recover $11.34 million of the owed money.
The agency is pursuing $5.06 million in GST and $4.62 million in pay-as-you-go (PAYG) withholding taxes – the money companies keep from employees to pay to the tax office – dating between September 2022 and January 2025.
The documents also show a claim of $250,569 for unpaid superannuation and $1.4 million for Solomos’ personal income tax.
If the tax office successfully holds a company leader personally liable for tax debts through a director penalty notice, personal assets can be seized, bank accounts farmed and bankruptcy filed.
Derrimut did not respond to questions from The Age.
The Australian Tax Office would not comment on matters before the courts, but a spokeswoman said it was important to ensure businesses met their tax and superannuation requirements.
“We take strong and deliberate action to deal with those who ignore their obligations and refuse to engage with us to pay their outstanding amounts,” she said.
Solomos was last year spotted among the bidders at The Block finale, when five properties sold to billionaire Adrian Portelli for $15 million.
The gym boss told The Age in November that his business employed more than 800 staff and he had a goal of opening 300 gyms by 2030.
The launch of the Port Melbourne venue last year marked the company’s first foray into the inner city.
It’s now working on setting up a prime CBD location.
Sources with knowledge of the situation, but who cannot be named because they are not authorised to speak to the media, say Derrimut has leased the Bourke Street site that used to be home to Virgin Active.
Construction works are under way after a building permit was issued in March this year by the City of Melbourne.
Derrimut’s most recent openings have sparked disputes with local councils over patronage and parking.
The company took the City of Port Phillip to the Victorian Civil and Administrative Tribunal in March to fight a council decision to reduce the Port Melbourne gym’s member limit from 450 to 250.
The council had received complaints about motorists ignoring parking rules or using the nature strip.
Last month, the tribunal supported Derrimut’s position, as the presiding member was not convinced the gym was to blame, finding there were existing street parking problems and limiting members might not make a meaningful difference.
Port Phillip Council was contacted for comment.
Last year, The Age reported that Derrimut’s then newly opened Oakleigh East branch had flouted a rule to limit its member numbers, causing parking chaos for nearby businesses and residents.
People line up outside the 24/7 gym in Oakleigh East, pictured in August, with security hired to manage patron limits.Credit: Joe Armao
A Monash Council investigation found up to 440 members were being let inside the gym at one time – more than double the 180 people allowed.
The gym sought to increase the patron limit to between 350 and 470 depending on the time. After a lengthy tribunal battle, a compromise was reached in April to allow between 260 and 400 members. Locals say the situation has largely improved.
Solomos narrowly escaped an attempted murder in 2015 when a masked gunman shot through the window of the car where Solomos was parked in the driveway of his Burnside home. The gunman was later linked to a rival gym owner with ties to the Comanchero bikie gang.
Solomos has denied having any ties to organised crime.
“It just doesn’t add up with my lifestyle,” he said at the time. “I’ll just put it out there that we’re not involved in organised crime, we’re not affiliated with anyone. We’re a family-owned business.”
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