HONG KONG: Gym franchise California Fitness has abruptly shut all outlets across Hong Kong, after two of its senior executives were arrested on Monday.
Customers who turned up at California Fitness branches on Tuesday (Jul 12) found the doors firmly shut. The company behind the gym, JV Fitness, shut all its 12 branches in the city, leaving 100,000 customers - many of whom had paid hefty fees to join - stranded.
Even though the company’s financial troubles are well known by now, customers said they received no prior notice for the closure. They said that until recently, they were still pushed by staff to extend their membership.
Staff said that they were also left in the dark. The firm’s 500 employees filed a police report on Tuesday alleging that money was transferred out of the company illegally.
“The gyms had a lot of customers. The staff don’t understand why they had to close since it seemed like money was coming in and the operation was profitable,” said Mr Bill Tang from the Federation of Trade Unions.
The employees said they are owed about US$1.3 million in salaries and customers may have pre-paid about US$130 million in fees. The fitness chain has already been sued by its landlords and suppliers. A former director also filed a winding-up petition.
Employees suspect the former director is still the real owner of the club and is doing so to get away with not paying back what he owes.