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Exclusive: ‘Significant interest’ in Fitness First buyout

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The potential sale of Fitness First UK has sparked “a significant amount of interest,” with the recovering gym chain having caught the attention of a slew of investors.

Fitness First UK managing director Martin Seibold told Health Club Management that the number of expressions of interest in the UK portfolio runs into double digits, with both private investors and trade buyers eyeing a potential buyout.

Fitness First Owner Oaktree Capital Management has said that all possibilities remain on the table in terms of the future of the company, but it has hired American investment bank Harris Williams to examine options for the UK business, while HSBC is advising on the gym chain’s overseas operations.

Having come close to collapse before its Company Voluntary Arrangement (CVA) in 2012, the chain has completed a remarkable turnaround, driven largely by its £200m+ transformation programme and a concerted move upmarket.

Since becoming Fitness First UK managing director in 2012, Seibold has presided over a major cull of under-performing locations, reducing a bloated estate of 185 clubs down to just 65 sites – mainly in prime London locations with a few outliers in affluent towns and cities.

“We had to make some very tough decisions to get rid of sites – we certainly didn’t get them all right,” said Seibold.

“There were some we should have kept and some we should have sold as well, but that's how it goes. It’s been a case of cooling down the turbine and ensuring we’ve got a solid portfolio of clubs with a clear proposition that is attractive to members.”

Having returned to EBITDA growth for the first time in five years in 2014, Fitness First UK has continued to build momentum according to Seibold, who said since May 2015 the chain has enjoyed membership growth of 15 per cent in London.

“The membership growth in London has been insane,” added Seibold. “Since May, our like-for-like performance has been better than anywhere I’ve seen worldwide in my 17 years in the industry.

“It’s certainly been a tough turnaround, but the transformation is starting to pay dividends and all of our clubs are now in profit.”

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The potential sale of Fitness First UK has sparked “a significant amount of interest,” with the recovering gym chain having caught the attention of a slew of investors.
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