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Consumers

Former Hong Kong rugby star Ricky Cheuk to run new fitness chain in vacated California Fitness premises

Local consortium obtained significant rent discounts on seven premises including one in Hung Hom, which is set to open next month

PUBLISHED : Monday, 24 April, 2017, 11:01am
UPDATED : Monday, 24 April, 2017, 12:11pm

A newly established gym chain has quietly rented seven premises previously occupied by the shuttered California Fitness, with the first to open in Hung Hom next month.

Goji Studios, owned by a local consortium led by financial services firm Opus, was offered significant rent discounts after the seven prime locations had been left vacant for 10 months, the Post has learned.

Unlike California Fitness, whose members paid multiple years of membership fees in advance, Goji charges on a monthly basis to reassure customers who were left in limbo by the former chain’s sudden collapse.

About 64,000 members and 700 employees were hit last July as the operator of California Fitness, mYoga and Leap closed all its 12 outlets across the city amid unpaid debts amounting to more than HK$100 million. The gym chain had earlier been criticised by the Consumer Council for using intimidatory and misleading sales practices.

“We are not California Fitness,” Ricky Cheuk Ming-yin, chief operating officer of Goji Studios told the Post in an email.

The former Hong Kong rugby sevens player said the closure of California Fitness had provided a “special investment opportunity” to take over numerous vacated premises well suited for a fitness club.

Opus has taken over the former chain’s premises in Causeway Bay, Wan Chai, Central, Hung Hom, Mong Kok, Kowloon Bay and Tsim Sha Tsui. They would be launched before the end of August, Cheuk said.

It is understood that most Goji Studios outlets have been leased for five years at a total monthly rent of about HK$10 million. Its Hung Hom branch received a 13 per cent discount for a monthly rent of HK$1.3 million.

The consortium is currently in discussions with landlords to rent other vacant premises once used by California Fitness.

“Opening seven locations in such a short time requires sizeable financial resources. Opus has secured ample financial resources to support a successful business,” Cheuk said, assuring customers that his chain would not collapse like California Fitness.

Despite expensive rents and stiff competition from smaller rivals, Cheuk was confident about prospects for the fitness industry, with a plan to ride the wave of family interest in health.

“Our market research has found that Hong Kong people place great importance on health, and fitness is a growing industry,”he said, citing a 2015 survey that showed 69 per cent of respondents placed health and fitness as their top priority.

“In addition to sports lovers and health and wellness enthusiastics, we also target families and kids. We aim to offer activities that adults and kids can enjoy together as valuable family time,” he said.

The chain charges HK$588 a month for basic membership and HK$888 for a premium plan.

About 300 people had joined the chain as of last Friday, a sales manager told the Post. Many of them are former members of California Fitness.

Winnie Sun, an office worker who lost about HK$2,000 when California Fitness closed, joined Goji Studios this month.

“I need to lose some weight. The new gym is very close to where I live,” she said.

“I won’t put the blame on all gym chains just because of the closure of California Fitness. It was very rare for companies that big to be wound up in Hong Kong,” she said.

Despite her confidence, Sun chose the shortest plan – just six months.

“Even if it closes one day, the losses would be within an acceptable range,” she said.