California Wow Xperience Plc (CAWOW) will next month suspend operations at its money-losing Ratchayothin, Chaeng Watthana, Sukhumvit Soi 23 and Silom branches as part of its business rehabilitation plan.
California Wow Women, developed at a cost of 160 million baht, opened in Sukhumvit Soi 31 in 2006 but has since closed.
The financially troubled fitness club operator yesterday said the Central Bankruptcy Court has accepted its petition to begin the process of reorganising its business to strengthen finances.
The court's decision will allow the company to invest in its more popular locations and introduce new, smaller outlets.
Renovations and general refurbishment will begin immediately in the remaining clubs. The company will be installing more equipment, including strength training equipment, elliptical trainers and treadmills.
New services are also being added such as group exercise classes, innovative yoga classes and night-time workout parties.
California Wow plans be the first in Thailand to introduce the "compact" fitness club concept.
Outlets will be smaller and located closer to the offices and homes of members, reducing costs by avoiding high-rent malls.
The compact clubs - branded Wow Express - will be 1,000-1,200 square metres in size compared with the 2,500-6,000 sq m clubs California Wow currently operates.
California Wow plans to open its first compact club here next year.
Surasak Kongpanya, California Wow's director, said each outlet will cost 25-35 million baht.
He said about 10 such clubs could be opened in the next three years in Bangkok, and the company has already appointed a property agent to scout for suitable locations.
"California Wow has a good business model that is proven by its successful clubs such as the Siam Paragon, Pin Klao, Ekamai and Esplanade branches as well as the Chiang Mai and Pattaya clubs, which show good potential. The company can be strengthened by concentrating our best resources in these clubs," he said.
California Wow was hit last month by a 75.87-million-baht lawsuit filed by Bangkok Bank (BBL) for unpaid debts.
BBL is seeking repayment of 71.9 million baht in principal and 3.97 million baht of interest. The lawsuit, filed last December, seeks claims on a 15-million-baht overdraft, a 6.9-million-baht loan and a 50-million-baht promissory note.
The loan and promissory note were secured by the leasehold rights for California Wow's Chaeng Watthana and Ratchayothin branches.
In February 2011, the company was warned by the Stock Exchange of Thailand that it faced possible delisting due to poor performance and the fact that company auditors had issued a disclaimer of opinion on the firm's financial statements.
In October 2010, the company reported it had defaulted on 58.47 million baht of debt owed to TMB Bank.
A BBL source said that bank's legal action will proceed, as the customer has failed to service debts.
"Basically, a non-performing customer entering a legal process can still run its business," said the source.
"The company can build up member confidence to strengthen its operations."
