Total Fitness sold to Barclays Ventures
WILMSLOW-based gyms chain Total Fitness has been bought by Barclays Ventures after the firm was placed into a pre-packaged administration last Friday.
The business, which employs around 870 people in the UK and Ireland, said that the ownership change would coincide with a “substantial” investment programme across its network of 24 clubs. A sum for the transaction was not disclosed, although Barclays Ventures has previously stepped in to take control of other businesses whose private equity owners have walked away from their investments.
News of the firm’s administration will be an embarrassment for Legal & GEneral Ventures, the private equity firm which took an 80% stake in the business in 2004 alongside a management team led by former chief executive Robin Johnson in a deal which valued Total Fitness at £80m.
It bought the business from Kwik Save founder Albert Gubay. However, the sale did not include the freeholds to most of the chain’s properties and the business did not generate enough growth to deal with its mounting debt pile, which had risen to more than £110m until a refinancing announced earlier this year led to £87m-worth of loan notes owed to LGV being swapped for shares in the company – a deal that effectively wiped out most of the management team’s holdings in the business.
Total Fitness Group’s most-recently filed accounts also show that interest payments on the debt led to the firm declaring a pre-tax loss in the year to March 31, 2009 of £9.9m on sales to £59.4m.
New chief executive Graham Hallworth, who had previously led the buyout of Darwen-based Crown Paints alongside restructuring firm Endless in 2008, said that the new deal strengthened the firm’s balance sheet and would provide funds to help grow the business.
“The management team and I are delighted to announce this deal, which will enable us to focus on growing, developing and improving Total Fitness as a group. We look forward to working with Barclays Ventures, and to enhancing facilities for the benefit of our loyal members,” he said.
“The past two years have been challenging for the leisure industry, but Total Fitness has continued to attract new members thanks to our strong brand, full service offering and competitive pricing structure. This new investment will now enable us to build on those strengths and grow our market share by implementing a long-term programme of strategic investment. Total Fitness has an extremely bright future ahead.”
The company said membership of its chain of large (up to 80,000 sq ft), out-of-town gyms was close to an all-time high at around 182,000.
