The reinvention of the Chow brothers - from the sex industry to property

Property investor, Stonewood Homes director and former sex industry king John Chow talks to Jane Phare about his $2 billion target, overcoming his shyness and his purple Rolls-Royce.

There's a video on John Chow's LinkedIn page that shows him next to his gleaming $500,000 purple Rolls-Royce SUV, wearing a pair of bright orange Crocs. He's bought another Rolls, he tells the camera, this time a red one. "Here goes", he says gleefully, bending down to roll a miniature version of his SUV across the concrete.

He got the toy car off Ali Express for twenty-five bucks, he says chortling. The LinkedIn gag was to cheer up his 20,000 followers during the recent Covid-19 lockdown.

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The video is a rare sign of Chow's sense of humour. When he crosses his arms and poses solemnly for photos with his younger brother Michael, he looks more like the bad guy from a Hollywood blockbuster than the owner of a pair of orange Crocs.

He battles with shyness, something he works at daily to conquer. By his own admission he can be a little abrupt and has high expectations of staff. "Yeah, I'm quite direct. I can be quite ruthless."

Michael is more jovial and gentle in his manner, and his English, which he speaks with a Kiwi accent, is better than his brother's. He was always the more outgoing of the two; John kept his head down and worked in the background, avoiding social interactions. His language skills suffered as a result but he decided, in his mid-30s, to make an effort to change that.

He still struggles with English, sometimes making it difficult to follow his line of thought in an interview. But he's mostly upfront with sensitive questions, answering directly with his favourite phrase: "Yes, of course."

John (left) and Michael Chow with John's Rolls-Royce. Photo / Supplied

Yes of course he had frank discussions with his son and daughter, whom he doesn't want named, about why their dad spent nearly 20 years in the sex industry.

His kids, now 21 and 18, were brought up with it, their father working nights running strip joints. His son was just a toddler when the Chows opened their first club in Wellington.

"We accept that it's not everyone's cup of tea but also that it is a legalised business and there is a reason that myself and Michael got into the business. I have got nothing to hide."

And Connie, his wife of 24 years, what did she think of her husband owning strip joints?

"Connie is more of a traditional Chinese wife so she will support what I do."

John Chow makes a daily effort to overcome shyness and extend his business network. Photo/Dean Purcell.

The story of how John Chow swapped a career in computer science for one in the sex industry goes back to 1995. He'd moved back to Hong Kong in 1991 after completing his degree at Victoria University but four years later he got a call from his 19-year-old brother, five years his junior.

Come back to New Zealand to help me run our parents' takeaway business in Courtenay Place, was Michael's proposition.

The brothers renamed their parents' takeaway business J & M Fast Foods and worked through the night to dish up Chinese food, burgers, and fish and chips to Courtenay Place revellers. Chow remembers drunkenness and fights outside.

"We had a baseball bat under the counter."

Making takeaways was a skill the brothers knew well, having worked for their parents during their school years. It is the Chinese way, Chow says. You do not expect to be paid, but your parents will help you out later.

John (left) and Michael Chow worked with their parents, Thomas and Rose, in the family's takeaway business in Wellington. Photo/supplied

And they did. In 1999, the Chow brothers had saved up a deposit to buy the old ANZ Bank building in Courtenay Place for, he recalls, $1.2 million. It was 500 metres away from their takeaway shop and the brothers had plans to turn the building into a 60-bed hotel but later decided to lease it.

The trouble was, there were no takers. So the Chows' parents, seeing their over-committed sons struggling with a big mortgage in an era of high interest rates, sold the family home in Lower Hutt and the whole family moved into the first floor - parents Thomas and Rose; John, his wife Connie and their baby son; Michael and their sisters Vicki and Jenny.

It irked John Chow that other Courtenay Place businesses were thriving while their building was empty. The brothers had earlier turned down an approach from a businessman wanting to lease the bottom floor for a strip club. That would leave two floors above vacant, so they said no.

But Chow kept mulling over the idea, and in 2000 went into partnership with an Auckland strip club owner to set up Mermaid in Wellington. It was the beginning of an era where the Chow brothers became kings of the adult entertainment industry, owning strip clubs and brothels in each city.

John (left) and Michael Chow with Penthouse pet Scarlett Morgan at the opening of the Penthouse club in Auckland in 2013. Photo/Norrie Montgomery-

They earned a reputation, probably unintentionally, of people not to be messed with. In Wellington, when they turned up at property functions or auctions they were often the only Asians.

In Auckland, they were largely dismissed in business circles – Chinese brothers in an industry viewed as sleazy. Their public image was further tainted in November 2010 when the historic Palace Hotel in Auckland's Victoria St had to be demolished after renovation work damaged the building's foundations. The Chows had bought the 1886 building in 2008 for $3.3m and had started work to turn it into a brothel.

There are Aucklanders who still believe the protected building was deliberately damaged so the brothers could legitimately demolish it and either build a high-rise or on-sell the prime land.

But parts of that theory don't pan out and there is evidence that the Chows were extremely unhappy over the Auckland Council's demolition order after cracks appeared in the walls.

Details are still murky about how the damage happened. One story is that the contractors removed the basement floor and excavated down to increase the ceiling height, to allow space for lap dancers.

Cracks started to appear, the building tilted and workers were evacuated. Chow is well aware of the rumours but, he points out, they had already sunk a considerable amount of money into the restoration and contractors were halfway through the job.

Auckland Council ordered the demolition of the historic Palace Hotel in Victoria St after cracks appeared in the building. Photo/Greg Bowker

Stories and photographs in the Herald at the time show the irate brothers trying to stop the demolition, parking their cars across the entrance way so contractors couldn't get access. They also tried to persuade the council to change its mind and threatened to take then-mayor Len Brown to court.

The council charged the Chows a $248,000 demolition fee and the brothers later tried to withhold an $875,000 payment to the contractors, Clearwater Construction Ltd, who had been working on the building. The contractors took them to court, the Chows lost and they had to pay up.

The bordello brothers then stirred up the locals even more by gaining planning permission to build a high-rise mega-brothel on the site but later onsold the land to a developer who built apartments instead.

It was an unhappy era for the brothers but now Chow shrugs it off. Insurance and the sale of the land, which had gone up in value over time, meant they made on the deal in the end.

In 2019 the Chows got out of the sex industry altogether selling the remaining Mermaid strip club businesses in Wellington and Auckland to their management, although they still own the two buildings.

Michael and John Chow during their strip-club era. Photo/Michael Craig.

The reason, Chow says, is that adult entertainment became the lesser part of their business. It was time to focus on property, hotels and building company Stonewood Homes, he says.

With that comes more respectability, though Chow knows he and his brother will always carry the stigma of the previous 20 years. And he knows they will have difficulty breaking into New Zealand's elite inter-generational business set - "yes, of course".

Chow is not resentful that he's not part of that group, nor does he see it as racist. "Once you accept that you are an immigrant then you feel better."

He set about building his own network, watching YouTube videos to learn public speaking. Working nights at the takeaway business meant attending Toastmasters wasn't an option.

After buying Stonewood Homes in 2016, Chow cranked up his LinkedIn profile to unashamedly promote himself as an "unstoppable entrepreneur". The Chow brothers' goal is to have $2 billion worth of assets by 2025, and they claim they already have $500m of that - made up of Stonewood Homes, the Pullman in Rotorua, the Oaks hotel in Wellington, and "12 to 15 buildings".

Taking over Stonewood, which was in receivership, proved a heftier undertaking than Chow anticipated. He and his brother inherited "unhappy employees, unhappy suppliers, franchise holders, clients and tradesmen," not to mention 190 half-completed houses in Christchurch.

They thought it would take six to 12 months to turn the business around. In the end, it took more than two years. They're now building 500 houses a year, with a target of 1000 by 2025.

And all the while, Chow works on building his network. He posts on LinkedIn almost every day and aims high with his guest lists, inviting the who's who of the business world to functions – Saturday's Stonewood-sponsored Joseph Parker fight, openings, corporate events. Some of them turn up, some don't, Chow says. He hasn't donated to any political party, "yet".

The Chow brothers paid Sir John Key a fee to open the Pullman Hotel in Rotorua last year. Photo/supplied

After converting a Rotorua building into a five-star Pullman hotel, the Chows asked former Prime Minister Sir John Key to officiate at the opening last year.

Did you pay Sir John? "Yeah, yeah," Chow says. Can you say how much? "No."

Chow is the master of shutting down a conversation he doesn't want to engage in. Back in 2012, the brothers were at the centre of a strip-club turf war in Wellington that went public and got nasty.

They opposed a liquor licence application by rival club owner Jacqui Le Prou, who planned to open a multimillion-dollar Calendar Girls in Wellington's Dixon St. Le Prou accused the Chows of "dirty tactics" to stop her club opening and the Chows accused her of poaching girls from Mermaid.

Two years later they were fighting again, this time with Le Prou opposing the Chows' application to renew the liquor licences for their Auckland and Wellington strip clubs and brothels.

The Chow brothers got into a strip-club turf war with Calendar Girls owner Jacqui Le Prou. Greg Bowker

But Chow doesn't particularly want to talk about Jacqui Le Prou. He uses a mixture of silence, language difficulties, and memory failure to avoid responding, finally saying, "Sorry, too long [ago], so ... I can't remember."

He's more forthcoming about his back story, one that saw he and his brother go from flipping burgers to making the Rich List, until NBR suspended them a year after they delisted their company.

It's a story that goes back to 1984, when the Chow family left Hong Kong for New Zealand.

To fit in, they adopted new first names. Thirteen-year-old Ka Yu became John and Ka Ming, 8, became Michael.

John Chow spoke almost no English and he remembers trying to navigate his way around for his parents by using sign language and a map at petrol stations.

It's a family unit that has remained tight. The Chow brothers' two sisters work for Stonewood Group and the two brothers do everything together. After their father died last year, Chow moved his mother from Wellington to live with his family in Ōrākei.

The Chow family at Hong Kong Airport in 1984, leaving to start a new life in New Zealand. Photo/supplied

When he decided to buy the new Rolls-Royce, he, Michael and their parents went to England to settle on the colour - "purple is powerful" - and to spec the interior, which includes the name "Chow" embossed on the driver's door sill. His father, he says, was proud of his sons.

"In the Chinese community, Chow brothers were pretty famous. Of course, sometime you have stigma but being a father [he is] seeing what challenges we [are] facing and we've been through."

The Rolls was Chow's first new car. Michael is the new car buyer in the family, so John Chow normally inherited his brother's cast-offs. He turned his new purchase into a networking opportunity, organising a glitzy party jointly with Rolls-Royce in Auckland to unveil the car and to celebrate 25 years of the Chow brothers' business partnership.

He laughs at the memory of his 50th birthday last year. Michael bought him an e-bike. He admits to using it religiously for the first month but the Rolls, and an everyday Mercedes, have gradually replaced pedal power.

Chow doesn't ooze flashiness – apart from the purple Rolls, that is. He wears an Apple watch, a 50th gift from his son, and his initials, JC, are embroidered discreetly on the cuff of his shirt. His suits are understated, made by Hong Kong tailors who, pre-Covid 19, came to New Zealand regularly to measure up Kiwi clients.

"But it's not expensive. The whole thing [suit] is only a thousand bucks."

The Chows' Stonewood offices on Auckland's Queens Wharf are efficient rather than luxurious and spending is watched carefully. Chow tells his staff that a colour photocopy costs 10c compared to 1c for black-and-white. Do you get 10 times the value out of the colour copy, he asks staff? If not, don't use it.

When John and Michael Chow first attended property functions and auctions in Wellington in the 90s, they were often the only Asians in the room. Photo/Dean Purcell

On Chow's LinkedIn page there's a photo of the brothers standing next to a private jet. It's not theirs, but a jet is included in the $2b-in-assets-by-2025 plan - providing staff don't print too many colour photocopies.

He and Michael zoom around the harbour in their 19m launch, and Chow is building a holiday home at Jack's Point in Queenstown. He's already planning for semi-retirement, perhaps when he's closer to 60.

His thinking is this: Thomas Chow died at 78, so John Chow thinks that if the same happens to him, he has about 400 months left and wants to enjoy some of them.

Away from the effort of putting himself out there publicly, Chow's life is simple: walks along the beach with Connie, yum cha at Grand Harbour, steam bowl in Hobson St, watching thrillers or Korean dramas on Netflix in his basement home movie theatre.

Looking back, Chow regrets his years of shyness, of keeping in the background at the takeaway shop. If he had his time again, he would start the coming out process earlier.

His advice to other young immigrants, and would-be entrepreneurs, is to make the effort.

"Don't be afraid people will say no because every next becomes [the] next yes." Keep trying, keep asking questions, he says.

"Shake more hands. Every hand you shake is more opportunity. I keep pushing myself to do better, better than yesterday. That's my philosophy."