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FITNESS, HEALTH, WELLNESS

Latest news

Fitness First UK tells HCM it's in restructuring talks

Fitness First UK has confirmed to HCM that it's restructuring its operations
The move comes amid rising costs and changes to working patterns as a result of the pandemic
The company currently has around 43 clubs in its portfolio and recently closed its London Bridge location
Owner Dave Whelan is reportedly in talks with landlords about reducing rents while also considering disposals and further closures

Fitness First UK has confirmed to HCM that it's in the process of restructuring, citing rising costs and working from home which has undermined some of its city centre clubs.

The company is attempting to renegotiate rents and considering a reduction in the number of clubs. Fitness First recently closed its London Bridge club, transferring members to nearby locations.

A spokesperson for Fitness First Clubs Ltd, told HCM: “While many of our clubs are performing well, with hybrid working continuing across the country there are fewer people using some of our city centre facilities and this has had a financial impact on the business.

“As a result, we're working closely with our landlords, creditors and shareholders to secure the long-term future of our clubs. We are confident this plan is the best way to ensure a sustainable future for the company.

“Our clubs remain open as normal during this time and members will not be affected.”

Fitness First currently has around 43 clubs in its portfolio. It lost £2.48m in 2020 due to the pandemic, against a profit of £7.6m in 2019, but losses accelerated to £23m in 2021. The company is a month late filing its 2022 accounts.

The move on landlords has echoes of that undertaken by Virgin Active, which restructured in May 2021 when it sought and was granted legal approval to wipe out its rent arrears following the pandemic closures.

The bottom line in both cases is that landlords are ultimately being asked to support the business so it can continue trading and get back on track. The risk for Fitness First is that landlords may pass the sites to other more successful operators.

Dave Whelan has had a few challenging times as a health club operator. In early August 2020, his DW Sports went into administration, with Mike Ashley snapping up 73 gyms which have subsequently been rebranded as Everlast.

Fitness First, which was founded in Bournemouth UK in 1993 by Mike Balfour, grew to be a global chain and one of the best recognised health club brands before being broken up via various transactions.

Current ownership rests with a number of entities, including Fitness and Lifestyle Group (Australia), Life Fit Group in Germany and Fitness First Clubs Ltd, which acquired all 62 Fitness First clubs in the UK before selling 14 of those to The Gym Group which has successfully rebranded them.

In 2017, the Fitness First Asia business that was operating in Hong Kong, Indonesia, Malaysia, Philippines, Singapore and Thailand, merged with Celebrity Fitness to create Evolution Wellness, co-owned by Oaktree and Navis Capital Partners. Clubs in Hong Kong were permanently shuttered due to civil unrest and COVID closures in April 2022.

The brand successful in Germany, where its consumer ratings are high.

In an exclusive interview with HCM recently, Martin Seibold, CEO of Life Fit Group said "Fitness First Germany is very different from Fitness First in other markets...let’s first look at Google ratings. In 2022, Fitness First had over 17,000 individual Google ratings; seven clubs now have over 1,000 ratings. There’s no other business in Germany – in any sector – that has more... these are real reviews and our average score was 4.8.

"The second is NPS, and with an average score of 45 across 200,000 surveys in 2022, Fitness First’s is the best of any gym chain in Germany."

Speaking to HCM in February 2022, MD Lee Mathews said Fitness First UK was concentrating on innovation and improving the customer journey. You can read this interview here.

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Latest news

Fitness First UK tells HCM it's in restructuring talks

Fitness First UK has confirmed to HCM that it's restructuring its operations
The move comes amid rising costs and changes to working patterns as a result of the pandemic
The company currently has around 43 clubs in its portfolio and recently closed its London Bridge location
Owner Dave Whelan is reportedly in talks with landlords about reducing rents while also considering disposals and further closures

Fitness First UK has confirmed to HCM that it's in the process of restructuring, citing rising costs and working from home which has undermined some of its city centre clubs.

The company is attempting to renegotiate rents and considering a reduction in the number of clubs. Fitness First recently closed its London Bridge club, transferring members to nearby locations.

A spokesperson for Fitness First Clubs Ltd, told HCM: “While many of our clubs are performing well, with hybrid working continuing across the country there are fewer people using some of our city centre facilities and this has had a financial impact on the business.

“As a result, we're working closely with our landlords, creditors and shareholders to secure the long-term future of our clubs. We are confident this plan is the best way to ensure a sustainable future for the company.

“Our clubs remain open as normal during this time and members will not be affected.”

Fitness First currently has around 43 clubs in its portfolio. It lost £2.48m in 2020 due to the pandemic, against a profit of £7.6m in 2019, but losses accelerated to £23m in 2021. The company is a month late filing its 2022 accounts.

The move on landlords has echoes of that undertaken by Virgin Active, which restructured in May 2021 when it sought and was granted legal approval to wipe out its rent arrears following the pandemic closures.

The bottom line in both cases is that landlords are ultimately being asked to support the business so it can continue trading and get back on track. The risk for Fitness First is that landlords may pass the sites to other more successful operators.

Dave Whelan has had a few challenging times as a health club operator. In early August 2020, his DW Sports went into administration, with Mike Ashley snapping up 73 gyms which have subsequently been rebranded as Everlast.

Fitness First, which was founded in Bournemouth UK in 1993 by Mike Balfour, grew to be a global chain and one of the best recognised health club brands before being broken up via various transactions.

Current ownership rests with a number of entities, including Fitness and Lifestyle Group (Australia), Life Fit Group in Germany and Fitness First Clubs Ltd, which acquired all 62 Fitness First clubs in the UK before selling 14 of those to The Gym Group which has successfully rebranded them.

In 2017, the Fitness First Asia business that was operating in Hong Kong, Indonesia, Malaysia, Philippines, Singapore and Thailand, merged with Celebrity Fitness to create Evolution Wellness, co-owned by Oaktree and Navis Capital Partners. Clubs in Hong Kong were permanently shuttered due to civil unrest and COVID closures in April 2022.

The brand successful in Germany, where its consumer ratings are high.

In an exclusive interview with HCM recently, Martin Seibold, CEO of Life Fit Group said "Fitness First Germany is very different from Fitness First in other markets...let’s first look at Google ratings. In 2022, Fitness First had over 17,000 individual Google ratings; seven clubs now have over 1,000 ratings. There’s no other business in Germany – in any sector – that has more... these are real reviews and our average score was 4.8.

"The second is NPS, and with an average score of 45 across 200,000 surveys in 2022, Fitness First’s is the best of any gym chain in Germany."

Speaking to HCM in February 2022, MD Lee Mathews said Fitness First UK was concentrating on innovation and improving the customer journey. You can read this interview here.

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23 Feb 2023
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HAF,FIT,IND,PTS
2023/THUMB351218_919174_401769.png

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