California Wow to undergo rehabilitation

Bangkok Bank, the creditor of California Wow, last month filed a lawsuit after the fitness club was unable to repay debts of Bt75.87 million.
As part of its reorganisation, California Wow will, in June, suspend services at its money-losing clubs in Ratchayothin, Chaeng Wattana, Sukhumvit Soi 23, and Silom.
Members of these four clubs have been invited to join other nearby California Wow locations. They are also being given a free one-year membership at all California Wow clubs, inclusive of all benefits enjoyed by current members.
Surasak Kongpanya, director of California Wow Xperience, said that the favourable court decision will allow the company to invest without encumbrances as well as plan for the launch of a completely new format of the club in line with international trends.
California Wow has a good business model that is proved by its successful clubs such as those in Siam Paragon, Pinklao, Ekamai, and Esplanade, as well as the Chiang Mai and Pattaya clubs that show good potential, Surasak said. The company can be strengthened by concentrating resources in these clubs.
However, the overall health of the company has been adversely affected by a few clubs that are located in malls that have lost popularity but where the company pays rentals that are higher than at even its most successful locations. Without the burden of the clubs in low-traffic locations, it expects a rapid recovery, he said.
Surasak said that as part of a second strategy to strengthen the company’s position, California Wow is also aiming to be the first in Thailand to introduce a new format of ‘compact’ fitness club that will be located closer to homes and offices and, which can reduce the costs of membership by avoiding the high rents of malls.
“International brands such as Anytime Fitness, Snap, and Curves have been very successful with this format and are adding more than 200 clubs a year to their network. By pioneering this global trend in Thailand, we also aim to strengthen our leadership position in this market,” he said.
The ‘Wow Express’ compact club will cost approximately Bt25 million to Bt35 million and California Wow is planning its first ‘Wow Express’ club for next year.
California Wow Xperience has approximately a 55-per-cent share of the branded fitness-club market and last year it recorded sales of Bt1 billion.