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Members of Gold's Gym in downtown Shanghai were shocked to discover yesterday that the fitness center has been shut down and court officials are preparing to auction off its assets to cover back rent and three-months unpaid wages for its 180 employees.
Yesterday, members were told all access had been closed off on Wednesday night.
A court order posted in the lobby of Jiu'an Plaza on Tongren Road, Gold's home since it opened its doors in October 2000, said the company had failed to pay its rent and its property will be auctioned off.
The gym currently has more than 1,800 members, with annual membership fees running as high as 3,800 yuan (US$458)
Shanghai Jiu'an Real Estate Co filed a lawsuit against Gold's on January 24, claiming the gym owed more than 3 million yuan (US$361,000) in unpaid rent dating back to December 2001.
Gold's signed a 10-year lease with the company in October 2000, with rent running more than US$23,000 per month.
On April 15, the court ordered Gold's to move out of the building by August and pay its back rent. Gold's said it would appeal the decision but failed to pay its court fees of 25,000 yuan (US$3,024.07).
"The gym is so irresponsible to all the members. It should have informed us beforehand and returning our money or helped us to transfer to other gyms," said a member surnamed Han.
"It even sold cards the day before it shut down. It defrauded us," she said.
Benjamin Swinnerton was disappointed the gym was closed yesterday, but he was also very lucky.
"I planned to buy a membership card after trying the facilities for a few days. It is a good gym," said the Brit who has been using a trial membership this week.
The court held off closing down the gym to avoid inconveniencing members and allow Gold's time to find another facility to take over the center, said Qiu Lian, a court spokeswoman.
"When Jiu'an told us that all negotiations were broken off and asked us to execute the decision on Tuesday, our officials went there on Wednesday morning to check the gym equipment for auction," she said.
But the sight of court officials created panic among members and employees.
"Some 100 angry people gathered in the gym -- it was chaos. Some even began to steal anything they could. To keep order and protect property, we closed the gym," said court official Wang Jianming.
"Members can report to the police if the gym has defrauded them," said Qiu.
Shanghai Daily was unable to reach Gold's officials yesterday. Officials weren't even in court in April when the decision was announced, and they didn't respond to any later legal proceedings.
Money from the auction will be used to pay back salaries first and then rent. It is highly unlikely any money will be left over to pay back members, according to court officials.
This isn't the first time the gym has left members in a lurch. Gold's first planned to open in 1999, but, after collecting membership fees, pulled out of the city due to a dispute between the US parent company and its local partner. Many months later the gym did open, recognizing memberships sold previously.
Gold's is one of the world's best-known fitness chains, with more than 650 facilities and 3 million members in 27 countries and regions.
The Tongren Road branch was its only outlet in China.
(eastday.com November 14, 2003)
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