California Fitness, Hong Kong

For the record, FuelMix is not, and never was, a member of California Fitness gyms.

1.   Thanks For The Memories...
2.   Gay Boy Central
3.   You Spin Me Right Round Baby, Right Round 
4.   A Potential Buyer..?? 


So.....let's see:

1.   Thanks For The Memories...

• 20 years of extremely aggressive sales tactics on the street and in their premises;
• staff ganging up on customers to join or renew gym memberships;
• customers incurring huge liabilities sometimes years in advance;
• utterly skewed and unjustified pricing difference between customers using the same branch of the gym at the same time;
• unauthorized credit card billings - in some cases, months before their memberships expired; 
• allegedly homophobic or gay-for-pay personal trainers using their looks and muscles to intimidate male customers into signing up for long-term personal training sessions by openly criticizing a customer's appearance and technique in the gym, ganging up on him to sign - and then laughing amongst themselves afterwards;
• years of customer complaints in the media with no action taken;
• increasing complaints of lack of hygiene;
• finally - after 20 years - named and shamed by the Consumer Council following a further spike in complaints aggressive sales tactics;
• and still the gym continued its tactics.....

2.   Gay Boy Central

And not forgetting:

1. This is a gym chain whose branches around town were and are, HUGELY popular with gay guys;
2. A gym chain very famous for gay cruising in the gym;
3. A gym chain notorious for gay action in the locker room, showers and steam room;

-----of which allegedly the staff were fully aware and tacitly encouraged it as a means of getting male customers.(But don't expect them to ever admit that).


3.   You Spin Me Right Round Baby, Right Round

1.   What goes around comes around.  After decades of squeezing their customers, California Fitness has  found itself on the receiving end of a Big Squeeze.......a Winding-Up Petition against the holding company JV Fitness, lodged by a pissed off creditor (we assume their Landlord) for unpaid water and electricity bills on its Whampoa Branch in Hung Hom which opened in March 2016. A couple of days ago, it shut down abruptly to howls of anguish from the boys in spandex and compression shirts.


2.   It's now emerged that since its opening, the Whampoa branch was the subject of an even more-aggressive-than-usual sign up campaign with many customers signing away big bucks.  More curious is that the Directors of the holding company that owns all the branches around town, resigned one after the other from April 2016 to June 2016 and the company is apparently looking for a buyer. The biggest joke in this is that the Winding Up Petition was lodged.....by a former director of California Fitness' holding company.  He quit in April 2016 and issued the Winding Up Petition via another company of which he is a Director.

What a fuckin' mess.......!!

3.   As at 8 July 2016 not only is the main California Fitness gym chain affected, but so is its sister gym, Leap.

4.  The total number of gyms or studios of this group now in financial trouble is currently 12. A partial list of branches' liability taken from online reports in the South China Morning Post looks like this:

• Whampoa - liable for HK$2.47 Million;
• Leap - liable for HK$976,000.00;
• Tuen Mun - liable for HK$2.23 Million;
• Quarry Bay - liable for HK$2.82 Million;

5.   As at 8 July 2016, the latest reports from the SCMP state that California Fitness' debts are as high as HK$130 Million, with a staff of 500 and a total gym membership of around 100,000, many of whom are getting disgruntled by the day.  In other words, Stages 1, 2 and 3 of not being able to do business.

6.   It's not surprising that customers of all their branches around town are increasingly agitated to discover whether their gym branch is also affected by the Winding-Up Petition (We haven't seen the Petition but if it is directed against the holding company then the answer would be yeah.....all branches are affected and cannot continue in business unless the Liquidator authorizes it) and what's gonna happen to the big bucks they also handed over. 

7.   It hasn't helped that over the last few days, all California Fitness branches have stopped accepting new members. In other words, Stage 4 of not being able to do business.

8.   Apparently some personal trainers (yeah, including the allegedly homophobic, gay-for-pay ones) as well as other staff are lining up in black scarves to hide their faces, demanding unpaid salary and commissions of several million bucks.  Stage 5 of not being able to do business.

9.   A Facebook page, set up a couple of days ago, called California Fitness Victims Group has over 1000 members bitching and shrieking for a refund.  Some have reported their grievances to the Police as well as the Customs & Excise Department.  That's Stage 6 of not being able to do business. We have news for them.....in a winding-up of a company, gym members (regardless of how much they paid) rank as ordinary unsecured creditors with no preferential treatment whatsoever.  From a legal point of view, the prospects of getting their cash back are zero (That doesn't stop a new buyer of the chain from voluntarily offering refunds, but that carries the risk of huge capital outflows).

10.   But reporting the issue to the Police and the Customs & Excise Department, might be a different matter.  The conduct of the Directors, putting the chain up for sale, the Winding-Up Petition by one of the former Directors, the abrupt closure of the Whampoa Branch, the staggering amounts of debt, the refusal to take on new members at any branch, the unpaid salaries and commissions - and the general revulsion of their customers suggests, that a criminal offence may have been committed.

11.   Under the Companies Ordinance, a company commits a criminal offence if it carries on business, knowing that it cannot pay its debts. Its Directors would be liable.  Which now raises the question....are all the Directors still in Hong Kong or have they fled..??

12.   We fuckin' told you this was the Age of Destruction, Disruption and Dissonance. Have you read the series we wrote..?  No...? Stupid faggot.



4.   A Potential Buyer..?

As at 8 July 2016, the SCMP is reporting that there might be a potential buyer/white knight.  We'll see how this develops.

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