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Jun 1

Fitness First slims down to trim debt

Fitness Comments Off on Fitness First slims down to trim debt

A quarter of Fitness First's Australian gyms will be sold as part of a restructure. Photo: Edwina Pickles

STRUGGLING health club chain Fitness First has been forced to sell a quarter of its Australian gyms as part of a restructure to wipe $890 million of debt from its British parent company.

Fitness First Australia is a division of the global company Fitness First Group, which is undergoing a debt-for-equity swap with lenders Oaktree and Marathon.

The lenders have agreed to write off all the company's debt for an equity stake.

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The company, which will also shed clubs in Britain, has been hit by weak consumer spending and the rise of budget gyms. It is believed the Australian arm brings in more than 50 per cent of profits, despite accounting for only 25 per cent of clubs.

In an announcement yesterday, the company said it was selling 24 of its 97 clubs across the country that were underperforming to help improve its balance sheet.

''We have identified 24 clubs that do not fit our vision for the brand and these clubs are being put on the market for sale,'' said Fitness First Australia's managing director, Pete Manuel.

Advisory firm 333 Capital, which is helping the company find buyers, estimated the combined value of the clubs at about $50 million.

''It is a very attractive, national footprint of 24 clubs, and we are very confident of selling,'' said managing director Chris Martin.

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Fitness First slims down to trim debt

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