California Fitness liquidators’ report shows chain operated at a loss for more than three years
Nearly three years after the abrupt closure of the California Fitness gym group in Hong Kong and Singapore, liquidators for its parent company JV Fitness have ended creditor and former members’ hopes of recovering any of the money they are owed.
In a detailed report to creditors seen by and reported on by Singapore’s The Straits Times, liquidators from Ferrier Hodgson blamed JV Fitness's management and auditor for allowing gym members to fund the business for three years - during the period from 2013 to 2016 - even though it was already heavily in debt.
In Singapore, where it operated three facilities, it left nearly 27,000 members more than S$20 million (US$14 million) out of pocket.
In Hong Kong, where it operated 12 of gyms, including two called mYoga and one facility known as Leap, its collapse impacted 64,000 members and 700 employees.
The Singapore report revealed that JV Fitness had accumulated losses of more than S$20 million as early as 2013.
Between then and its closure in 2016, 99% of the company’s income was derived from fees collected from members even as it continued to bleed.
Deloitte, which audited JV Fitness’ financial statements in 2013, declined to answer liquidators’ questions on why it did not raise any warnings.
Immediately prior to its closure, the group, which was once famously fronted by action movie star Jackie Chan, was heavily criticised by the Hong Kong Consumer Council (HKCC) for deploying intimidation and misleading sales practices to press consumers into purchasing memberships and high-priced private lessons.
Images: California Fitness' former facility on Singapore's Orchard Road (top) and a group fitness class at California Fitness in 2016 (below).
13th February 2019 - Inaugural Singapore Fit Summit heralds evolution of Asian fitness business network
29th January 2019 - Report suggests Fitness and Lifestyle Group buys CMG Asia for $200 million
17th January 2019 - New body to represent Singapore’s fitness industry
14th July 2014 - Singapore fitness clubs hit by complaints
6th December 2010 - California Fitness’ Latest Hong Kong Club
26th October 2010 - World Gym acquires California Fitness in Taiwan
10th September 2009 - California Fitness Sells Malaysian Business
Asking a small favour
We hope that you value the news that we publish so while you're here can we ask for your support?
The news we publish at www.ausleisure.com.au is independent, credible (we hope) and free for you to access, with no pay walls and no annoying pop-up ads.
However, as an independent publisher, can we ask for you to support us by subscribing to the printed Australasian Leisure Management magazine - if you don't already do so.
Published bi-monthly since 1997, the printed Australasian Leisure Management differs from this website in that it publishes longer, in-depth and analytical features covering aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues management.
Subscriptions cost just $90 a year.
Click here to subscribe.
The Complete Guide to Leisure Industry Products & Services.
Track. Engage. Retain GreeneDesk is a suite of cloud based software solutions helping health clubs, leisure centres and swim schools to effectively track progression, improve customer engagement and…read more
Talk To Us For Independent Advice & Specialised Services We're business people, not sales reps IP HUB is one of Australia’s leading advisors on telecoms for both small businesses and…read more
AIS Water, the trading name of Australian Innovative Systems, is a multi-award winning, Australian owned leader in the design, production and supply of commercial and residential chlorine generators…read more
The Calgym/Synergy group has had a long and proud history since 1976 as world leaders in the innovation, design and evolution of commercial strength and conditioning equipment. The Synergy group was…read more
Leisure Concepts brings the world’s best fitness equipment brands to Australasia including Eleiko, Atlantis Strength and Merrithew Pilates. With a huge variety of treadmills,…read more
SLE Worldwide Australia is a Managing General Underwriter specialising in insuring risks in the world of Sports, Leisure and Entertainment. Be it relaxing, playing, organising or watching sports,…read more
Quayclean are a national cleaning and waste services partner with proven results in the understanding and delivery of cleaning needs and challenges faced by facilities including; major venues and…read more
get listed with our suppliers directory
Get your business noticed in our targeted directory. Viewed by 10,000 industry professionals per week!