The Chows and the Keys. Photo: Supplied
The Chows and the Keys. Photo: Supplied

BusinessFebruary 16, 2022

From J&M Fast Foods to J and M Key: a short history of the Chow brothers

The Chows and the Keys. Photo: Supplied
The Chows and the Keys. Photo: Supplied

John and Michael Chow have announced a new partnership with former PM Sir John Key and his flamboyant son. It’s the latest in a long line of eye-popping headlines.

Were it not for the fact a borderline-insurrectionist pandemic-induced fever dream is playing out in Wellington, yesterday’s news of a Key-Chow co-venture would be the talk of the water cooler. The plot development – sorry, property development – was announced in a statement promising an enterprise “focused on raising capital from wholesale investors” combining the forces of MTK capital, led by former prime minister Sir John Key and his social-media-personality-turned-developer son Max, and Stonewood Group, run by John Chow and his younger brother Michael.

The plan is to raise $100 million by the middle of 2023, with projects already under way in Auckland suburbs St Heliers, Glenn Innes and Wai O Taiki Bay. They intend to fund around 500 new homes. Key senior said: “New Zealand, with its property-owning democracy and historically strong migration patterns, makes property development a sought-after asset class.”

According to the release the former PM and ANZ chair has “known the Chow family for a long period of time and respected their business acumen, attention to detail and work ethic”. That’s not all they’re known for. An immigrant family, brothel pioneers, legal scraps and run-ins with councils – the Chow-Key collaboration is just the last chapter in a story rarely short of sensation.

Let’s flick back through some of the pages.

Hong Kong to New Zealand

In 1984, the Chow family arrived in New Zealand to start a new life, leaving a fledgling recycling business behind them. In an effort to make integration in the Hutt Valley easier for the boys, Ka Yu, 13, was now to be known as John; Ka Ming, 8, became Michael. 

J&M Fast Food

For anyone resident of or regular visitor to the great city of Wellington over the last quarter-century, J&M Fast Food is a culinary institution, its bright red sign a beacon in the Courtenay Place night. In the mid-90s, John and Michael took over the site from their parents, spruced it up and chucked their initials in the name. Their masterstroke: extending closing time to 6am. (It continues today under different ownership.)

The J&M experience.

Mermaids come to the rescue 

Having pocketed a modest profit out of J&M, the brothers purchased the old ANZ Bank building up the road, just past the St James. They threw their energies into a fried crispy chicken joint, called The Chicken Palace. It might have been ahead of its time. It didn’t work out. They tried to lease the three floors. No luck. It got so bad they and their parents and sisters moved into the property, selling the Hutt Valley home to keep them afloat. 

It was then, John told Hamish Rutherford for a Stuff profile, he faced his “darkest, dying moments”. He said: “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.” 

Desperate, they tried something different. Working with an Auckland operator, they decided to open a strip club. The mayor of Wellington, Mark Blumsky, furiously opposed them, as did thousands of residents and business owners. When they won approval despite all that, the brothers didn’t need to do any publicity: everyone knew already about this new place Mermaids. “When we opened we were full of people wanting to know what all the fuss was about. We spent almost nothing on marketing.” 

The council swiftly banned new strip clubs on Courtenay Place, meaning Mermaids had it to themselves. The 2003 passing of the Prostitution Reform Act meant they could swiftly expand their operation, and become brothel owners.

Suddenly it was all going swimmingly.

Property moguls

The Chows were quick to reapply their profits, purchasing commercial property and a hotel in Wellington, and looking to Auckland, too. They arrived in Auckland, wrote Pattrick Smellie of BusinessDesk, as the “Wellington bad boys” who “made a virtue of looking like a couple of gangsters in sharp suits, shiny shaven heads [and] flashy offices”. They continued to build their sex business empire, as well as gaining a reputation for turning unloved, bedevilled sites around. Their self-described approach: “identify properties that are both undervalued by the market and [where we] can see the opportunity to add value.”

They tried their hand at various other enterprises along the way, including at one point a “no-fee, no-win” litigation startupBy 2016, they had largely moved on from the sex business, and purchased the massive Christchurch residential building company Stonewood Homes, which was on the brink of collapse, and grew it back to a prime position as the property market just kept booming.

Clint Webber, Michael Chow and John Chow in a publicity shot marking their purchas of Stonewood Homes in 2016.

‘Strip club turf wars’

During their years as the most visible strip club and brothel operators in the country, the most lurid and shocking claims and counter-claims emerged in a series of legal battles with the owner of the rival Calendar Girls, typically under the umbrella of liquor licence renewal objections, in clashes routinely described in the media as “strip club turf wars”

When questions were raised about the culture, business tactics and working conditions at their clubs, the Chows could point to statements from the NZ Prostitutes Collective in their support. 

Racism and the Chinese community

“I remember at school and even university, people called us the Ching Chong Chinamen,” Michael told the Herald’s Corazon Miller in 2017. “I think over time, ­seeing us work hard and grow our ­business success, people don’t say that any more. I think we’ve earned greater respect.”

John told Pattrick Smellie: “I think one of the challenging parts is being Asian, Chinese, having a sex business. People think, ‘oh, they must be dodgy people.’ Which in the early days, it might be a bit.” 

In 2014, their appearance at a Chinese community conference raised the hackles of some, who felt they were inappropriate speakers. John Chow told RNZ’s Lynda Chanwai-Earle at the time: “I think we always get media attention – some of it because we are Asian and some of it because we’re in the sex business.”

The Palace Hotel saga

In 2008, the Chow brothers bought the Palace Hotel, a landmark property opposite SkyCity. Whatever the temptations of the name, there was no suggestion of a fried chicken emporium there. Their plan: refurbish and reopen the 1886 building as a “super brothel” in time for the 2011 Rugby World Cup. 

That hit a snag when, in 2010, work in the basement – reportedly to install pole-dancing infrastructure – resulted in cracks in the walls that saw the council decide that the building had to be bowled. The council accused them of failing to properly protect the property; some suspected they were deliberately seeking demolition to build a new 10-storey operation. The brothers vehemently rejected that, insisting that demolition was the last thing they wanted. At one point in their dispute with Auckland Council, the brothers threatened that if they refused to meet with them, they would send 200 strippers and prostitutes to protest outside every Eden Park World Cup game.

It’s not their only controversy around heritage buildings. They narrowly avoided prosecution in 2012 for demolishing the historic Willis Street Settlement restaurant in Wellington without applying for the required ­archaeological approval.

Rich listers

The Chow brothers got into an argument with another intriguing character in the business world, NBR publisher Todd Scott, when they were bumped off the Rich List in 2018, after questions were raised about the delisting of one of their companies. As Stuff reported, John Chow complained they were being treated “like two naughty school kids” while their wealth was investigated. “Their plans to take NZAX-listed Chow Group private has led to NBR taking a closer look at their privately held assets and their membership has been suspended pending further investigation.”

Scott suggested the Chows were pained by their absence; the Chow responded by shrugging their shoulders. They had, however, routinely described themselves as “rich-listers” and framed their NBR-listed richness for hanging on office walls. In 2017 the NBR rich list valued them at $170 million. It’s likely their property portfolio today is worth more than a billion. 

Celebrating 25 years.

‘Unstoppable’

Today, the Chow Brothers are almost entirely in the property game – financing, developing and building. They no longer have any sex industry interests. “You could also say it comes with some legacy and some moral issues and all that. We accept that that’s not everyone’s cup of tea but then that’s also part of our history. We’re not going to deny that,” John told Smellie. 

At the end of 2019 on Linkedin – where he gives himself the epithet “unstoppable entrepreneur” – John wrote, “we now truly have created an unstoppable machine”, before listing some of the brothers’ achievements, including hotels in Wellington and Hamilton, the purchase of an online magazine based in Hong Kong, and further growth for Stonewood Homes.

He added: “In October, Michael and I revealed our new Rolls-Royce Motor Cars and celebrated our company’s 25th anniversary with my friend, business partners, and staff … Our failures have only made us stronger in the long run, as we learn from them and come back with more knowledge and skill than when we started.” Their success had “nothing to do with luck”, he said, but was the fruit of “hard work, loyal staff, decisive decisions, an eye for hidden equity and a willingness to take risks; that’s why we are on this unstoppable path to Billionaire status.”

Keep going!