KPMG appointed to handle Fitness First workout
BRIAN Green – the North West turnaround specialist at business advisers KPMG – has been appointed to lead a CVA deal at ailing gyms operator Fitness First.
Mr Green, who has acted on two CVAs for Wigan-based JJB Sports over the last three years, is working with national restructuring head Richard Fleming on Dorset-based Fitness First.
The deal will see the debt-laden, private equity-backed company walk away from nearly half of its gyms.
The chain, which employs 1,500 staff, wants landlords to back a company voluntary arrangement (CVA) that will see it offload 67 of the 147 clubs it runs in the UK to other operators over the next six months.
The deal would leave Fitness operating 80 sites, 57 of which will move to monthly rent payments, while five others will see their rent cut by more than a third for three years to help make it a leaner business.
Eighteen clubs will be unaffected and a further 14 that Fitness rents to other operators will also be sold. The deal with give 120 landlords returns of up to 28p in the pound compared to just 0.5p in an administration and could allow them to share around £5m from the company’s turnaround.
According to PropertyWeek.com, six of the 67 sites it is proposing to offload are in the North West. Three are in Greater Manchester – Manchester Central, Moston and the Klick Manchester site in Gorton – while the others are in Runcorn, Preston and Crewe.
