Profitable skin game more than bottom lines

There is something about Winnie Fok that does not quite fit with the business of bulging flesh, greasy pimples, coarse back hair and balding men.

Her appearance is meticulous, from the royal blue tailored dress down to the neatly crossed ankles worthy of an entry in a finishing school textbook.

The office space that surrounds her is a pristine sea of white and pine. The art is understated, the lighting flattering and there is a soft hush of voices.

Even the occasional fluffy clouds that dot a tranquil landscape photograph hanging on the wall seem just a bit too perfect.

It all seems at odds with the world of pot bellies and receding hairlines. But 18 floors below, the masses are bringing their unwanted fat, unsightly blemishes and swollen wallets to Ms Fok and her investors in their own quest for perfection.

Ms Fok is chief executive of Investor Asia, a private equity fund sponsored by Swedish listed company Investor AB that includes Marie France Bodyline among its portfolio. The chain of slimming centres is conspicuous for its pervasive use of celebrity advertising and slightly disconcerting "before and after" photographs.

Its philosophy is more genteel than the pumping and grinding of traditional weight-loss techniques. It favours counselling, education and treatment of target areas over blood, sweat and tears. The clientele is not really fat, they just want to be more toned and fit into a smaller dress size.

No mess, no fuss, and definitely no sweating. It is slimming by persuasion rather than exertion.

"There's no need to do vigorous exercise at all," Ms Fok explains. Nor is there a set diet. "It means you don't give people prepackaged meals, you don't say `no carbs' ... you believe in a healthy way of eating."

Nutritionists go through individual eating habits and advise accordingly. Throw in a number of sessions with a consultant and a few body wraps, and in two to three months, you get your desired shape. Or so the literature says. There is no question clients will be a few dollars lighter.

The brand has its roots in Switzerland and entered the Hong Kong market about 20 years ago. Investor Asia picked it up from PAMA Group, one of Asia's oldest private equity firms, in November 2002 for US$96 million. The deal included three other brands - Bella, Svenson and Harvard. The former offers skin-care treatments, while the latter two target follically challenged men and women seeking to defy their genetic fate.

"We never promise miracles because only God can give miracles," stresses Ms Fok. "At Svenson, we prolong the process. If [clients] notice something and come to us early, there's a lot of help they could get." She is equally defiant of Marie France Bodyline sceptics. "It has been around for nearly 20 years. If it were a hoax, I wouldn't have a sustainable business."

The extent of this sustainability is, however, not for public consumption. Ms Fok is tightlipped on the profitability of the company, except to say that it is "healthy".

It is a sizeable operation: Marie France has 68 centres in Asia, from Malaysia, Thailand and Indonesia to the recently opened Shanghai branch and nine outlets in Switzerland. Marketing is key to the group, and represents "a large sum" of its outlay, according to Ms Fok.

In the first quarter of this year, Marie France ranked as the third-largest buyer of fitness centre advertising in spending nearly $6 million, according to industry watcher Admango. As a whole, the industry pumped nearly $930 million into advertising last year, figures from ACNielsen show.

Given the figure was just $200 million two years ago, does she account for the seemingly increased allure of the industry to female purchasing power?

"It probably started with the fashion industry. People are more affluent and fashion-conscious," she notes. She sees the trend is aspirational and post-materialist rather than strictly health-focused, in contrast to the United States and Europe. The former in particular has declared a war on obesity amid heightened awareness of the medical and fiscal consequences.

Marie France instead "brings out the concept of beauty and what is generally accepted as beauty", Ms Fok explains. "Women want not just to do the best at their job, but to look their best ... we look better, feel more confident."

She visited the slimming centres herself in the name of due diligence. "Yes, it worked," she says.

Yet she still believes in moderate exercise - Ms Fok walks for an hour a day - and pooh-poohs potions and pills. "There's lots of side effects with that. I'm not trying to bad-mouth anyone, but you should be very careful."

Likewise, she rolls her eyes at fad diets. When asked about her brother's experience in weight loss - her famous sibling, Canning Fok Kin-ning of Hutchison Whampoa was at one point reported to be an advocate of the Atkins low-carbohydrate diet - she sighs. "He travels a lot and entertains a lot."

She describes their relationship as "extremely close". The youngest of three (her other brother is a paediatrician), Ms Fok says her background is "a typical middle-class family".

Her parents came to Hong Kong in the late 1940s from China. Life was initially difficult, but her father got a job in government and ended up as a primary school headmaster. Her mother was also a teacher.

All the siblings were expected to attend college: while Canning chose music, Ms Fok opted for commerce.

After some accountancy and advisory work, she "got talking" with Francis Leung Pak-to at high-flying investment bank Peregrine. She was asked to take Peregrine Direct Investments under her wing in 1994. The fund was doing deals across Asia, from Korea to Indonesia, home of the notoriously ill-named Steady Safe taxi firm that brought the bank to its knees by failing to repay US$280 million in loans in early 1998.

"When they set up [Peregrine] Fixed Income, we all knew it needed a very strong balance sheet," she recalls. As the Asian financial crisis began to bite, "we knew liquidity was tight. I was trying to divest as much as I could.

"We didn't really expect it to go under that quickly. I thought it was caught up in a terrible time. And it was a very short time."

It was the toughest period of her career. "Because we had all these glorious plans in place, we established our track record, we were going out fund raising ... all of this was going on, and one day it just went bust. It was hard."

The pace of life at Investor Asia appears to be less heart-stopping. Her Swedish bosses are "very consensus-driven".

Plans on the boil include a men's skin centre that will tackle such disfigurations as unruly back hair. "Men feel a bit intimidated going along to a ladies' slimming place," she explains. "Yes, they come in - for their mid-section, most of them."

There appears to be no rush to divest the portfolio. "We will divest. Listing is a route. But not yet. Since we've only started to approach the China market, we want to establish a foothold there.

"As a fund we cannot fall in love with our investments. With this one, it's very easy to fall in love." - 2004 June 21  by Jane Moir   SOUTH CHINA MORNING POST    The Monday Face         


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