The sportswear tycoon Dave Whelan is heading for a showdown with landlords over plans for an overhaul of his Fitness First gyms empire that might contain web site closures and steep hire cuts.
Sky News has learnt that Mr Whelan, best-known as the previous proprietor of Wigan Athletic Football Club, is working with advisers on a restructuring plan for the well being golf equipment chain he purchased in 2016.
Property trade sources stated this weekend that the proposals might be formally unveiled as quickly as subsequent month.
One landlord stated they anticipated that roughly 1 / 4 of Fitness First’s roughly 45 UK golf equipment might be earmarked for closure.
Another probably affected property-owner stated they anticipated Mr Whelan’s group to hunt hire reductions of as a lot as 90% throughout a few of its remaining gyms.
According to essentially the most just lately filed accounts for Fitness First Clubs, the corporate misplaced greater than £10m within the yr to 31 March 2021, though its efficiency throughout that interval was hammered by the pandemic.
Its accounts for the next yr at the moment are practically a month overdue.
The bulk of Fitness First’s operations are in London, with golf equipment in distinguished places reminiscent of Oxford Circus, Baker Street and Liverpool Street.
Filings present that earlier this month, Teneo Financial Advisory was appointed administrator to Fitness First (Curzons) Limited, an organization affiliated to the broader group.
Further particulars of Mr Whelan’s proposals had been unclear this weekend, whereas the influence on jobs on the firm because of potential gymnasium closures may additionally not be ascertained.
The tycoon, who based JJB Sports, which grew to become certainly one of Britain’s greatest excessive avenue sporting items retailers, acquired a big chunk of Fitness First’s UK operations seven years in the past as a part of a separate restructuring of the multinational gyms operator.
Under completely different possession, Fitness First had beforehand shed dozens of struggling UK golf equipment by way of a mechanism often known as an organization voluntary association in 2013.
The use of a restructuring plan somewhat than a CVA to implement its newest overhaul may show controversial amongst affected landlords.
Virgin Active, one other gyms group, deployed a restructuring plan to drive by way of a monetary restructuring in 2021 because it teetered getting ready to collapse.
The mechanism permits corporations to ‘cram down’ collectors to drive proposals by way of even when they vote in opposition to them.
Mr Whelan himself has additionally skilled the sharp finish of the well being and health sector as competitors has grown, significantly amongst cheaper operators.
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In 2020, DW Sports, the chain he based in 2009 after buying 50 websites from JJB Sports, crashed into administration, citing the influence of COVID-19 lockdowns.
Roughly half of the corporate’s 1,700-strong workforce was saved when Mr Whelan’s rival, the Sports Direct tycoon Mike Ashley, engineered a deal for his Frasers Group to purchase simply over half of DW Sports’ websites.
The gyms trade has confronted extraordinary turbulence in recent times, with the pandemic and hovering vitality prices having a marked influence on operators’ potential to earn money.
The Gym Group, a London-listed chain, has seen its shares halve over the last yr, and it now has a market capitalisation of simply £185m.
Mr Whelan couldn’t be reached for remark, whereas Fitness First didn’t reply to a collection of emailed requests for remark despatched on Friday and Saturday.
Content Source: information.sky.com