Fitness First proprietor Whelan plots hire cuts in showdown with landlords

The sportswear tycoon Dave Whelan is heading for a showdown with landlords over plans for an overhaul of his Fitness First gyms empire that will contain website 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 business sources mentioned this weekend that the proposals might be formally unveiled as quickly as subsequent month.

One landlord mentioned they anticipated that roughly 1 / 4 of Fitness First’s roughly 45 UK golf equipment might be earmarked for closure.

Another doubtlessly affected property-owner mentioned 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 probably the most just lately filed accounts for Fitness First Clubs, the corporate misplaced greater than £10m within the 12 months to 31 March 2021, though its efficiency throughout that interval was hammered by the pandemic.

Its accounts for the next 12 months at the moment are practically a month overdue.

The bulk of Fitness First’s operations are in London, with golf equipment in distinguished areas resembling 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 impression on jobs on the firm because of potential fitness center closures may additionally not be ascertained.

The tycoon, who based JJB Sports, which turned one among Britain’s greatest excessive road 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 totally different possession, Fitness First had beforehand shed dozens of struggling UK golf equipment via a mechanism often called an organization voluntary association in 2013.

The use of a restructuring plan reasonably 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 power via a monetary restructuring in 2021 because it teetered on the point of collapse.

The mechanism permits corporations to ‘cram down’ collectors to power proposals via even when they vote towards them.

Mr Whelan himself has additionally skilled the sharp finish of the well being and health sector as competitors has grown, notably 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 impression 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 business has confronted extraordinary turbulence lately, with the pandemic and hovering vitality prices having a marked impression on operators’ means to earn cash.

The Gym Group, a London-listed chain, has seen its shares halve over the past 12 months, 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.