China
Customers worried after fitness clubs closed
By Chen Xin (China Daily)
Updated: 2011-01-14 08:00
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BEIJING - A fitness club giant has suspended business in five of its centers in the national capital, leaving tens of thousands of members worried about getting their prepayments refunded.
Nirvana Fitness and SPA Co Ltd, which has more than 20,000 members in Beijing, said on its website on Thursday that it closed its five clubs on Wednesday and will later announce the reopening date.
The company's marketing manager Wu Xiaotian said problems in Nirvana's capital chain caused the business suspension.
"The board of directors is discussing money-raising measures. We hope to resume business as soon as possible," he told China Daily on Thursday.
Wu said some investment companies and fitness industry counterparts have expressed interest in injecting capital into, or buying, the company.
"If we can reopen our stores, we will compensate our members for the duration of the suspension, or ensure their prepayments are refunded," Wu said.
"We expect to know the answers before March and will release compensation information before then."
Nirvana became one of the country's earliest fitness center chains when it opened in 2000.
It has 16 outlets with about 80,000 members nationwide. It is also one of the earliest fitness centers to win the five-star supreme title awarded by the country's top sports administration.
Wu said one Beijing store and 10 in other cities will remain open.
A club member, who only gave his surname Jiang, said he began fitness training at Nirvana's Zhaolong center three years ago and spent 3,000 yuan ($454) in December to buy this year's membership.
"I'm worried I can't get my money back," the 28-year-old said.
Jiang said Nirvana employees told him the outlet will be temporarily closed when he went there at about 2 pm on Wednesday.
He received a text message from the company about the store's closing at about 4 pm.
Another member, who only gave the surname Li and has been a Nirvana member for eight years, said some clients had already paid for the next 15 years, which cost more than 20,000 yuan.
"Many members, including me, worry a lot about the financial losses. We hope we won't be cheated," the 38-year-old said.
The stores' closings may also mean hundreds of employees will lose their jobs.
"I was astonished when I heard at an internal meeting on Tuesday night that we would suspend business," Nirvana fitness coach Liu Peng said.
"The bosses gave no clear answer as to when, or even if, we can go back to work. I'm still waiting for information from the company. I hope I can keep my job, or I'll have to find another one."
Wu Xiaotian said the Baisheng outlet's water supply was cut off by the property management company on Jan 4, leading to the store's business suspension on Jan 4 and 5.
Nirvana's general manager Wang Cheng had earlier admitted his company was hit hard by the economic crisis that started in 2008, and had lost club members and earned lower profits, China Central Television reported on Thursday.
Zhang Guanghui, a fitness coach at Ozone Fitness, another gym club in Beijing, said he worried Nirvana's store shutdown might extend to other fitness clubs.
"There are big risks in investing in the fitness industry," he told China Daily. "Too fierce competition may make it difficult for many clubs to survive."
Ge Youshan, a lawyer specializing in consumer rights at the Beijing Lawyers Association, said consumers should feel they have the right to protection when prepaying.
Consumers should choose businesses with good reputations and credibility, he said. They should read every clause of any agreement and understand their rights and responsibilities. And they should avoid prepaying huge sums and make records of all payments, Ge said.
Companies in industries where prepayment is common, such as fitness centers, beauty salons, car washes and laundries, should regulate their service to establish the credibility needed to ensure their sustainable development, Ge said.
Industrial associations and relevant government departments should also strengthen supervision to achieve win-win situations for both industries and consumers, he said.
Gan Tian contributed to this story.
China Daily