KUALA LUMPUR (Dec 19): Fashion retailer Bonia Corp Bhd (KL:BONIA) is venturing into the health and wellness market with a joint investment in fitness centre operator, Macroverse Sdn Bhd (MVC).

Bonia signed a shareholders’ agreement with Peak Physique Health & Fitness Sdn Bhd (PPH) on Thursday to jointly subscribe to three million new shares in MVC, representing its entire equity. Bonia will hold a 50% stake, valued at RM1.8 million, financed by internal funds.

The group announced to Bursa Malaysia that Bonia and PPH had agreed to co-operate in a joint venture to manage MVC's health and fitness centre under the brand 'Peak Fitness', located at Ikon Connaught Cheras. PHP holds the brand's trademark and owns a string of fitness centres under the same brand throughout Malaysia.

Bonia said the centre's strategic location is a key advantage, which will allow the business to tap into a diverse customer base comprising local residents and students seeking affordable and convenient fitness options. The group sees opportunities to generate recurring revenue through memberships, classes and community events tailored to both groups.

However, Bonia acknowledged the risks involved in the fitness industry, including high competition, seasonal demand fluctuations, customer retention challenges, and potential impacts from economic downturns and health regulations.

“MCV’s failure to achieve sustainable growth may impact the financial performance of Bonia Group. Although the board holds that its expectations are reasonable at this point of time given the prevailing circumstances, there can be no certainty that such expectations will materialise,” it said in its filing.

For the first quarter ended Sept 30, 2024 (1QFY2025), Bonia reported a net loss of RM1.85 million compared to a net profit of RM8 million in the same period last year. The loss was attributed to higher operating costs, including rental expenses and increased depreciation from the opening of new boutiques.

Revenue for the quarter fell 16.85% year-on-year to RM80.15 million, primarily due to weaker consumer spending in Malaysia and Singapore. Bonia attributed this decline to rising costs of goods and services, higher tax rates in both countries, the floatation of diesel prices, elevated interest rates and increased asset prices.

On Thursday, Bonia’s shares closed three sen or 2.14% lower at RM1.37, giving the company a market capitalisation of RM281.4 million.