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California Fitness Winding Up Saga (Compiled)


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Guest boredatwork
1 hour ago, Cube3 said:

Hmmm my membership up for renewal...(sigh)

 

if its me i will 100% jump to other gyms.

unless you like the heavy cruising in Cali

which is actually one of the main reasons a few of my friends wanna stay :wacko:

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Guest Fatty
On 13 July 2016 at 11:43 AM, Guest boredatwork said:

 

if its me i will 100% jump to other gyms.

unless you like the heavy cruising in Cali

which is actually one of the main reasons a few of my friends wanna stay :wacko:

Please don't go. Cali needs cash now.

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It depends on whether the Sg biz is separate entity from HK biz. If it is not separate then it might get entangled once biz is liquidated. Not sure how biz works though.

Life is like a river flowing into the sea, Love Life.

 

Love, Joy and Peace.

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I’m a victim too, says ex-owner of California Fitness

 

Wong Ping-kuen claims he was lured into buying the embattled firm, without seeing all the facts

 

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Underlying and pre-existing problems plagued the finances and sales tactics of ailing gym chain California Fitness months before its closure, a former owner said on Wednesday, claiming that he was the “ultimate victim”.

Speaking publicly for the first time since the gym chain’s ailing state came to light, former owner Wong Ping-kuen hit back at accusations and said he was duped into buying JV Fitness in December last year at a price of HK$50 million without seeing a key auditing document.

Only months after he bought JV Fitness – which also runs mYoga and Leap – did he find out about papers advising that the company was no longer fit to run, he said. Since the purchase, he has also pumped an extra HK$20 million into its 12 now-closed outlets across the city.

He said the situation was exacerbated by the chain’s notorious hard sell practices, inherited from past owners, so deep-rooted that he found them impossible to change.

In wake of store closures, California Fitness staff stage protest march to Hong Kong police headquarters

They eventually got him and his wife arrested by customs officers in April.

“My wife could not sleep ... and we lost HK$70 million,” said Wong, who eventually decided to let go upon family’s advice. “I am indeed a victim.”

He said he sold the business to his brother Wong Lun, who is now in talks with mainland buyers, because he did not want the business to fold.

Recounting his fall from grace, the former director said he was lured into buying the company by then shareholder Wu Ge via another former director, Cheng Kar-tat in December.

Judge questions whether liquidation of California Fitness being sought to pass on responsibilities to others

He claimed Cheng said: “He told me that it’d be a bargain to buy that many outlets at a price of HK$50 million, Mr Wong.”

Cheng allegedly went on: “I’ll help the company make loads of money.”

Wong said that, despite Cheng claiming the company had been vetted, JV Fitness turned out to be in serious debt. The audit pointed to HK$335 million in net liabilities for 2014.

And, according to Australian media, Gu pleaded guilty in court there to manipulating the share price of another company just months before he sealed the deal with Wong.

Branches of struggling California Fitness shut down across Hong Kong

Wong, among the first 50 to sign up as a lifelong member at California Fitness, said he had tried to change the company’s sale tactics, slammed earlier by the Consumer Council, since he took over.

But he said he faced resistance from Cheng, in charge of operations, and gym trainers, some of whom earned as much as HK$100,000 per month after Cheng hiked commissions. Employees’ wages cost up to HK$18 million out of the HK$40 million revenue, he said. Wong said all the senior management had abandoned ship since he got on board.

http://www.scmp.com/news/hong-kong/economy/article/1989522/im-victim-too-says-ex-owner-california-fitness

 
 
 
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California Fitness was pumped for growth, but not fit for purpose

 

Jason Ng says the slow decline and eventual demise of the ambitious but questionably run chain should be a lesson, not a source of schadenfreude, for its remaining rivals

 

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Twenty years ago, a Canadian entrepreneur walked down Lan Kwai Fong and had a Eureka moment. Eric Levine spotted an opportunity in gym-deficient Hong Kong and opened the first California Fitness on Wellington Street, a few steps away from the city’s nightlife hub. Business took off and by 2008 the brand had flourished into two dozen health clubs across Asia. There was even talk about taking the company public on the stock exchange.

Hong Kong chief executive looks to improve consumer protection in wake of California Fitness collapse

Then things started to go south. The chain was sold, broken up and resold a few times over. Actor Jackie Chan got involved and exited. The Wellington Street flagship was evicted and shoved into an office building on the fringe of Central, while key locations in Causeway Bay and Wan Chai were both lost to rival gyms. What was once the largest fitness chain in Hong Kong began a slow death that preceded the actual one that stunned the city this week.

California Fitness operated on the so-called Gillette business model. Like a cheap razor, gym membership was offered at a low rate – sometimes as little as HK$100 a month – to get consumers on the hook. The real money-maker was the overpriced razor blade: personal lessons at up to HK$800 an hour. The strategy encouraged aggressive sales tactics and over the years devolved into a Ponzi scheme: staff were pressured to constantly recruit new members to subsidise the existing ones who tended not to fall for their sales pitches.

The strategy encouraged aggressive sales tactics and over the years devolved into a Ponzi scheme

Blame it on the competition, at least in part. Pure Fitness, a better-run alternative, threw its hat into the crowded ring in 2005. Within years, the formidable new entrant peeled away the high-end clientele. Haemorrhaging customers and revenue, California Fitness had little choice but to take the hard selling up a few notches.

As the numbers game intensified, so too did complaints against California’s unscrupulous sales practices. Staff were known to lure unsuspecting passers-by with free gifts and free trials, only to have their ID and credit cards held hostage until they signed on the dotted line. Members who declined to renew their personal training contracts were punished by neglect – their trainers suddenly too busy for an appointment. In one particularly egregious case, an autistic teen was reportedly detained in a club for hours and coerced into taking out a HK$90,000 loan to pay for a fitness package.

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Hong Kong chief executive looks to improve consumer protection in wake of California Fitness collapse

Still, members who relented and purchased expensive plans didn’t always get their money’s worth. Trainers often wasted paid time on mindless chit-chat with clients or put them on a cardio machine while they played with their phones.

Things fell apart, sometimes literally – a false ceiling collapsed and injured three in a steam room in 2014

Substandard services were matched by poorly maintained facilities. Members bemoaned old equipment, bad hygiene and rampant locker room theft. Things fell apart, sometimes literally – a false ceiling collapsed and injured three in a steam room in 2014. More troubling still, slack management allowed some of the clubs to become notoriously cruisy. It was not uncommon to spot two pairs of feet under the curtain in the same shower booth at the Mong Kok club.

All that culminated in the chain’s undoing this summer. After reports of financial trouble surfaced and creditors came knocking on the door, the two-decade-old enterprise finally pulled the plug. On Tuesday, management shut down all 12 gym and yoga locations and threw hundreds of staff and tens of thousands of members into limbo.

It appears that Pure Fitness stands to be the biggest beneficiary of California’s downfall. But Pure will be well served to learn from its competitor’s blunder. As the yoga-fitness-apparel-health food chain expands rapidly in Hong Kong and China amid chatter of an imminent initial public offering, Pure Fitness bears the hallmark of an ambitious upstart eager to build a growth story. The pressure to succeed will again be borne by club managers and personal trainers.

The trick is knowing how to meet the corporate goals from on high without falling into the same trap that destroyed its ill-fated rival.

Jason Ng is a lawyer, freelance writer and author of Umbrellas in Bloom. Follow him on Twitter @jasonyng

http://www.scmp.com/comment/insight-opinion/article/1990053/california-fitness-was-pumped-growth-not-fit-purpose

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California Fitness HK shutdown to affect S’pore?

California Fitness HK shutdown to affect S’pore?
The California Fitness outlet at Velocity@Novena. Photo: California Fitness 
 
 
Sudden closures in Hong Kong and China leave members worried about the future of S’pore office
PUBLISHED: 10:35 PM, JULY 14, 2016
UPDATED: 9:41 PM, JULY 15, 2016
 

SINGAPORE — Customers of California Fitness Hong Kong were caught by surprise this week when they turned up at its outlets and found the doors shuttered. JV Fitness, which owns the gym franchise in Hong Kong, China and Singapore, closed all its 12 branches in Hong Kong on Tuesday (July 12), with the outlets in Beijing, Shanghai and Guangzhou following suit.

The abrupt closure has left some Singapore gym members jittery about the future of the fitness chain here. California Fitness Singapore — which has three outlets in Bugis, Raffles and Novena — further added to the uncertainty when it could not respond to TODAY’s queries by press time on Thursday.

 

Members whom TODAY spoke to said they had not received any notice from the Singapore office.

Healthcare worker Martin, who declined to give his full name, said: “I’m concerned as it is the same company that runs all the gyms. I have no idea what the cash flow is like for the company, and they recently closed the Ngee Ann City branch.”

Some members have already been hit by the closures overseas.

Human resources manager Ang Ging Yin, who bought an Asia membership pass in Shanghai for 10,000 RMB – which allows access to gyms in China, Hong Kong and Singapore — was refused entry at the Bugis outlet on Wednesday night.

“The assistant member service manager said she has to deny me entry because I am a China member,” said the 34-year-old. “I was taken aback as I have been using it since I returned to Singapore from Shanghai last year. She said management had given notification that Singapore was a standalone (company) now. I don’t know how I can get a refund.

“I have been a California customer for six years but after the incident and the recent news, this just leaves a bad taste in consumers’ mouths.”

Andrew Phillips, the Managing Director of Fitness First Singapore, said that addressing members’ concerns was key. He said: “California Fitness should in light of the sudden closures in Hong Kong, respond quickly to update their stakeholders on whether Singapore operations will be affected or if it will be business as usual ... its members need to know that their memberships will not be mishandled.”

Part of a wave of big-brand gyms that sprouted here in the past two decades, California Fitness — which opened in January 1998 — shut its Orchard branch in February, citing “variable business strategies and decisions” for the closure. Other gym operators such as women’s only gym Vivafit and True Group had also closed outlets in recent years.

With increasing rental costs and competitors muscling in on the scene amid a challenging economic climate, industry experts whom TODAY spoke to said it is crucial to stay innovative and relevant to the customers’ needs. “There’s no shortage of exercise styles, trends and fads in Singapore today ... the fitness business has become incredibly competitive,” said Phillips.

The fitness chain will be launching a new club concept at their Capital Tower outlet next month, said Phillips. “Trends come and go quickly and customers can be fickle, so fitness brands need to work at staying relevant to our members’ fitness needs and lifestyles,’ he said.

“We also need to be agile enough to innovate and be in a position to provide the most up to date expertise to deliver the best results for our members.”

Irving Henson, who is the managing director of strength and conditioning gym The Pit, believes that big-brand franchises like California Fitness need to rethink their business model of selling multi-year packages to keep up with the changing times, particularly with 24-hour gyms like Anytime Fitness and Gymm Boxx opening in the heartlands.

“They sell memberships for three years, which means no revenue (after the initial sale) and with rentals going up, that’s not a very sustainable plan,” he said. “People don’t want to be tied down. Some of them like Gymm Boxx charge per entry and there are so many choices now.

“The market is very saturated, but it all works well together ... we are a small facility and we work on building our brand in strength and conditioning.”

Added former national sprinter Muhammad Amirudin Jamal, manager of Anytime Fitness at the Kallang Wave Mall: “We try to give our members value for money, and show them that it’s a worthy investment in themselves and make them feel like they are part of the community.

“We are working on our customer service. It’s no longer about a customer coming in to do their own workout, but people picking where they want to go based on their relationships with the people there.”

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Guest Stressed
27 minutes ago, fmen said:

California Fitness closed Raffles Club Today  

 

 

CALIFORNIA FITNESS RAFFLES CLUB

Dear Members,

Raffles Club is closed until further notice.

Members please proceed to Novena and Bugis Clubs.

Thank you.

 
California Fitness Singapore Official Page's photo.

I just signed up 20 personal training sessions with a personal trainer. Can I get my money back.

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Guest Fatty
3 minutes ago, ban said:

i just signed the package, can i cancel the membership....

Thank you for sustaining the gym operations for another day. Lifetime members need more members like you. 

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Try case for claims if they become liquidated or small claims court. They now still in operation so might not able to claim.

Life is like a river flowing into the sea, Love Life.

 

Love, Joy and Peace.

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3 hours ago, ban said:

i just signed the package, can i cancel the membership....

Check their membership terms clause for the free look period. Maybe can cancel still.

Life is like a river flowing into the sea, Love Life.

 

Love, Joy and Peace.

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Looks like cali gym in sg also got affected! Now they closed down raffles branch! Soon the other two branch also might close!

对自己好是一种幸福,

对别人好是一种积福。

 

Spend time counting your blessings,

not airing your complaints.

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31 minutes ago, Guest guest said:

how to take back my money . I brought $6000  package from them.

 

Very difficult to take bad the money. In the event of company liquidation, you will not be the priority to lay claim on the remaining funds (if any).

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When you sign the package there will likely be a rule which states that your money will not be recovered if such a case happen. Thats why theres a need for you to read the terms and conditions carefully before you sign. And you are the person to sign it.

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Guest Idiots

Why are there so many idiots who signed with them? They have been inconsistent and unprofessional in their dealings since day one. Super idiots!

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Guest Cali Ex Operation Staff
1 hour ago, Guest guest said:

how to take back my money . I brought $6000  package from them.

 

If you brought it less than a year..... they will pro-rate the amount and refund you back..... but not applicable to PT sessions hor.

 

If the mmbrship is more than a year and you are paying a yearly renew rate.... they will just pro-rate you the renewal fee...eg. Renewal fee / 12mth= X dollars

 

You can see from the contract.... as it written clearly there.

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I don't think the members should be mocked because gym operators constantly recruit members.

The cleanliness at Bugis is very good.

My sympathies goes out to the staff whom I have known for a long time...

 

I personally have no problem with California but I would caution others of signing personal trainer packages with them.

Why? Because like the above articles stated, the trainers are often chatting with their students or looking at their phones.

The training method is non-existent.

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Guest Guest
3 hours ago, superflawless said:

This would have serious repercussions on the other gym outlets. Never again would I pay long term packages.

I would opt for per entry charges like Gymm Boxx, which is also 24 hours.

 

Heng sway one la... I got my lifetime membership more than a decade ago... ROI all got already.

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my guess is that washing the towels requiring them to sign some kind of contract with the service provider. And since they already know very well that they will be closing on a certain date, it no longer makes sense to renew the said package with the service provider.


Hence no towels.

 

Just a guess.

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Guest Guest

No towel? Then all the gym equipment would be dirty with all the sweat? Members also cannot shower since no towel given! Pity that califonia fitness will ended like this.

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Guest Thanks
5 minutes ago, Guest Guest said:

No towel? Then all the gym equipment would be dirty with all the sweat? Members also cannot shower since no towel given! Pity that califonia fitness will ended like this.

 

Yup, tonight may be their 金大班的最后一夜.

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Guest Guest
1 minute ago, Guest Thanks said:

 

Yup, tonight may be their 金大班的最后一夜.

This is really sad. I used to go california fitness before, their gym class is fun. Environment also not bad.

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Guest who think cali is cheap

No towel no aircon still don't bear to close. Still 你浓我浓, 依依不舍? Awwwwww so unlike their usual sassiness!

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Guest Risky

From time to time we will read about sudden business closure in the Straits Times. I am very alert when I bought any prepaid ticket of the now defunct Towel Club, Club 17 and Cruise Club which is in business; I make sure I use it in a short period of time. Minimize the risk.

 

Cali engaged very aggressive marketing years ago. Their questionable business model comes with poor cash flow and high expenses and as such the end of the business. I feel the next big business failure are those ride company that always try to grab your attention.

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Guest Fuck Andrew How that P-O-S

Anyone successfully retrieve your membership fee back from them so far?

I have also paid upfront $5K two years ago for membership renewal.

If they closed down today, I would have literally been paying close to $200/mth so far

wtf.

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Guest with no eye see

Of cos different management, but parent company aka source of capital is the same! Why seeminly "clever" people can be still so naive ! Like they were born yesterday!

 

 

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California Fitness shuts Raffles Place outlet

A sign at the Republic Plaza outlet's entrance says the gym is closed "until further notice". The building's management said it terminated the lease agreement and repossessed the premises after the fitness chain failed to pay rent despite several attempts to "engage" JV Fitness.ST PHOTOS: DESMOND WEE

Gym chain California Fitness closed its Raffles Place outlet yesterday "until further notice", but The Sunday Times has learnt that the unit was repossessed due to its failure to pay its rents .

This has raised the possibility that the chain, having shut all its outlets in Hong Kong last Tuesday after chalking up millions of dollars in debts, is also in financial trouble here and set to pull out from Singapore as well.

The chain, run by parent company JV Fitness, yesterday put up a notice on Facebook and at its Republic Plaza Tower 2 branch to say the outlet was "closed " and directed members to its remaining outlets in Novena and Bugis.

Staff at the gym's Bugis Junction Towers branch told The Sunday Times that the closure of the Raffles Place outlet was temporary, but could not say when it would reopen. When contacted by phone, the club's general manager, Mr Paul Lim, said he was busy and hung up.

Attempts to reach JV Fitness were also unsuccessful.

CROWDING THE CLASSES

We already felt the impact when the Ngee Ann City branch closed as the remaining gyms were more packed. So I am worried it will be even harder to book classes now.

MS LIM, a gym member who goes to the chain's Bugis Junction outlet twice a week.

A spokesman for Republic Plaza building management said it had made several attempts "to engage JV Fitness on its rental arrears".

"Regretfully, these were not fruitful despite best efforts," he said. "Hence, pursuant to the terms of the lease agreement between the tenant and landlord, the lease agreement has been terminated and the premises re-entered and repossessed."

When the first California Fitness gym opened here in 1998, it was one of the first "mega-gyms", with a floor area more than five times the size of an average gym then. By 2002, the chain had more than 15,000 members.

The Ngee Ann City outlet closed in February this year. California Fitness said it was due to "variable business strategies and decisions".

After JV Fitness closed all its 12 gyms in Hong Kong last week, including two called mYoga and one facility known as Leap, a spokesman for California Fitness told reporters "California Fitness Hong Kong and California Fitness Singapore operate separately and independently", and declined further comment.

An irate gym member, who wanted to be known as Ms See, was at the Bugis branch yesterday to demand a refund for a 26-month package she paid $1,700 for on July 7.

"Before I signed the contract, I added a clause to say that in the event that it closes any one of its outlets, I had the right to get a refund. But the staff just told me they could not process a refund for me," said the 38-year-old, who works at a logistics firm.

She has informed her bank to stop further payments to the gym.

Another member, compliance officer Ms Lim, 26, who goes to the gym twice a week, said: "We already felt the impact when the Ngee Ann City branch closed as the remaining gyms were more packed. So I am worried it will be even harder to book classes now."

Singapore's consumer watchdog chief has urged California Fitness to be more forthright about its upcoming plans.

Mr Seah Seng Choon, executive director of the Consumers Association of Singapore, advised consumers to ask the gym about the lease of the outlet they intend to use before signing a package.

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The path taken by Cali reflects  that operating a business in Singapore is really tough.

Overheads are so high here and regardless on the payments by "freshies", the profit margins are just too minimal.  The "no towel" notice doesn't auger well with the imminent fear and probably, impending winding/folding/closure. 

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