Chow Brothers documentary 911

National Portrait: the Chow brothers, giving the market what it wants

John Chow, the older half of possibly New Zealand's most famous brotherly business partnership, knows the word others use to describe their business style.

"Ruthless ?," he guesses, correctly, grinning. "Yeah, we are."

In around 20 years John and Michael Chow have risen from a Wellington takeaway shop they took over from their parents, to a broadening empire.

Best known for their strip clubs and brothels, the pair now have interests in commercial property, finance and, since early 2016, house building, with the purchase of collapsed Christchurch giant Stonewood Homes.

Claiming to manage more than $ 200 million in assets, the Chows say they will grow this to $ 1 billion by 2020.

Working in the sex industry requires steel, but the brothers have faced claims from former employees of unfair dismissal, and tenants who accuse them of jacking up rents at short notice. A rival flew former brothel and strip club staff to Auckland in a bid to dish dirt on the pair, in a bid to have an application for their liquor license rejected.

John Chow points out that year after year the business is granted licenses, despite the profile of the business and attempts by rivals to undermine them.

(The New Zealand Prostitutes Collective confirms it has a "good working relationship" with the Chows.)

The reputation comes from being "firm but fair", setting strict rules to be followed, so that minor disputes do not become time consuming.

"Otherwise, every meeting is 'what should I do, John? What should I do?' "

The pair have enemies ("the best person in the world has enemies" John reasons), but the legend fixes as many problems as it creates.

"You know, ruthless can be a good thing, or it can be a negative thing." Some people would not deal with the Chows because of their reputation. "At the same time, when someone wants to take you on ... they won't take you on."

No one, it seems, is above their tough approach.

In early May it emerged that Statistics New Zealand was paying possibly the most expensive lease by a government agency in the country, almost $ 800 a square meter, for several floors in Westpac House, a 1974 office tower on Lambton Quay in Wellington.

For roughly double the going rate for newer, more prestigious buildings, the Chows gave Statistics NZ, which was under pressure to resume publishing official figures, a difficult choice.

To get the several vacant floors in the building, it also had to sign a two-year lease for an entire floor of serviced offices, an expensive offering typically aimed at small businesses wanting leases as short as a few weeks.

The price would have remained secret, until the chows unexpectedly announced the building was for sale, providing a leasing schedule to potential buyers.

"The deal on the table was all or nothing," a spokesman for Statistics NZ admitted.

'NEXT TO AUSTRALIA'

Although the large bar in the Chows' central Wellington headquarters now proudly displays copies of the NBR rich list in which they feature, next to photos of All Blacks and former mayors, the brothers did not come from money.

They were born and initially raised in Hong Kong, where their father had a business in paper recycling, working long hours, doing heavy work, collecting offcuts from across the city.

The family - including sisters Vicki and Jenny (who also work for their brothers' company, CGML) - came to New Zealand in 1985, knowing very little about their new home aside that it was "next to Australia" and had many farms.

After adopting English names, for several years the parents worked at restaurants owned by uncles in Palmerston North and Porirua, until they had earned enough money to buy a unit on Courtenay Place, which would become the start of the Chow brothers' empire.

After studying computing at Victoria University, John returned to Hong Kong for work for several years, before Michael (who, after initially agreeing, then refused to be interviewed) invited him back to take over the parents' business. The decision was not easy.

"Working in a takeaway shop was like going backwards," John Chow said, but, like his father, he opted for the opportunities New Zealand presented.

Renaming the takeaway shop after themselves - J&M (which is still open now albeit with different owners) - the start was tough.

In a bid to increase revenue, the pair began a home delivery, with the brothers taking turns driving and cooking. John admits that when he started, he had no idea how to read a map, or even that odd and even addresses were on opposite sides of the road. Because of the cost, a single cellphone call to try to find the buyer would wipe out the profit of the sale.

Eventually the business generated sufficient cash for them to buy another property down the street, 73 Courtenay Place, which would not only come to define the brothers, but nearly break them.

Darkest, dying moments

Paying $ 1.4 million for the property, the idea of ​​a multi-level restaurant never came together, and a fried chicken restaurant failed.

For months the building lay empty. Low-ball offers to buy the property came in, as the building stood silent amid a street of thriving bars.

His parents sold the family home in Lower Hutt to reduce the sons' debt, and the entire family lived in the company's offices, a situation which lasted more than a year.

The all-in bet brought John close to a breakdown - he describes the time as his "darkest, dying moments".

"I didn't want to go outside. I was staying in my room most of the day.

"I didn't want to face the fail."

Eventually a plan was hatched to open a strip club, a venture which used a business idea given to the chows by a prospective tenant, a tactic they have used again.

When then Wellington mayor Mark Blumsky discovered the plan, he opposed it, building a storm of opposition.

"Every second day we're in the paper. People object, the whole Courtenay Place object," but the brothers had to push on.

"We were young and weren't sure if we'd be successful, but we've got not much option."

Ultimately, the project prevailed, as Mermaids fell within the consents. When the doors opened, it became clear that the storm of controversy had been a boon for publicity.

"When we opened we were full of people wanting to know what all the fuss was about. We spent almost nothing on marketing."

Better still, Blumsky's council passed a by-law banning strip clubs from Courtenay Place, too late to catch Mermaids, giving the venue a monopoly-like status for years.

SUPPLY AND DEMAND

In the years since the start of the adult entertainment business, the Chow brothers have quickly built an empire, and while there have been more strip clubs, and more brothels, most of the business is elsewhere.

The business has included considerable innovative and risky ventures. Buy a building with a problem, then find a solution.

Exodus, the Chows' gym business, was started when the brothers had a vacant building in Tory St.

Just Hotel (later sold and rebranded) was an unwanted office block on the fringe of the CBD, converted into accommodation.

The Chows have made similar moves to convert vacant offices in Auckland into hotels, and will soon do the same in Rotorua.

As flamboyant as any property developers, the chows appear to have little in the way of vision, beyond the desire to grow.

They focused almost entirely on Wellington until the Christchurch earthquake; Now development is focused almost entirely elsewhere.

While other developers talk of maintaining heritage or intensifying the urban environment, the Chows have a brutally utilitarian strategy.

"Go back to supply and demand. They only do that because they see demand. You don't want to spend the money doing something where you've got no demand."

'MY BUSINESS IS MY DNA'

Although they seem keen to broaden their profile from brothel barons, John Chow dismisses the possibility that the adult entertainment business should therefore be sold.

Partly out of an obligation to staff - he likes selling to saying "I don't like you any more" - and partly it appears to be a combination of pride and fatalism. It would change nothing.

"That is your history, that is your DNA. You can't change who you are. What's happened, happened.

"I can't change who I am because someone don't like my business. That's who I am.

"If you talk about moral judgment, I accept that it's not everyone's cup of tea to have a strip club or a brothel. I accepted that 20 years ago.

"But if you say, 'John, you should sell your business because someone judges what you're doing?' Probably not. "

Only probably not though. As dedicated as he is in one breath to his staff, any offer would be considered.

"Never say never. If someone says, John, I give you a check, I will consider it."