Gym chain goes into administration
National gym chain, Xercise4Less and its parent company Wright Leisure Topco Limited have called in administrators.
The Leeds-based firm has appointed Toby Underwood and Rob Lewis of PwC as joint administrators, who have confirmed the sale of the business to a subsidiary of JD Sports Gyms Limited (JDG).
The sale which included the majority of the business and assets of the Xercise4Less Group including 50 of its 51 gyms and all 400 staff. The chain’s site in Wakefield was the only one not included in the sale as it was closed prior to the administrators appointment.
The business is said to have faced “financial difficulties caused by an increasing competitive market, which was exacerbated by Covid-19”, had previously spoken of ambitious plans to double in size and have 100 gyms open by 2021.
The sale comes three days before indoor gyms across England are allowed to reopen with the further easing of lockdown restrictions. However, it appears the chain has had a torrid time, with reports in May that shareholders, investors and directors were looking to sell the business to seek additional funds following the appointment of restructuring specialist Alan Fort.
At the time a spokesperson said: “The decision has been taken to seek additional funds, with the best way of achieving this being to begin a sale process.”
Prior to this the gym group’s CEO, Peter Wright, left the business in January after less than 18 months in post and Jon Wright – founder of Xercse4Less handed over significant control of Wright Leisure Topco to 50-year-old, family-owned private investment house, Proventus Capital Partners which in 2018 invested £42m in the businesses. However in Wright Leisure Topco’s accounts for the year to 31 December 2018, the business had seen its losses increase by 20% to £10,484,000.
The administrators have confirmed there will be no interruption with regards to its existing 250,000 customer memberships.
Toby Underwood, joint administrator and PwC partner, said: “Following our appointment, we immediately completed a sales process that had been running for some time.
“This sale puts the ongoing business on a firmer financial footing and JDG will be working with the existing team to continue to grow and develop the new business.
“We are delighted that, in these extremely challenging circumstances, all employees have transferred to the purchaser.”
Alun Peacock, Managing Director of JD Sports Gyms, said: “We are delighted to have completed this acquisition which enhances our position in the highly competitive gym market and which will ensure the continued employment of many hundreds of people. We look forward to re-opening the gyms and welcoming our new colleagues and members, over the coming weeks.”
The joint administrators were advised by Andy Bates and Jonathan Jackson of Addleshaw Goddard.