Fitness First owner Whelan plots rent cuts in showdown with landlords | Business News

The sportswear tycoon Dave Whelan is heading for a showdown with landlords over plans for an overhaul of his Health First gyms empire that may contain website closures and steep lease cuts.

Sky Information has learnt that Mr Whelan, best-known as the previous proprietor of Wigan Athletic Soccer Membership, is working with advisers on a restructuring plan for the well being golf equipment chain he purchased in 2016.

Property business sources stated this weekend that the proposals might be formally unveiled as quickly as subsequent month.

One landlord stated they anticipated that roughly 1 / 4 of Health First’s roughly 45 UK golf equipment might be earmarked for closure.

One other doubtlessly affected property-owner stated they anticipated Mr Whelan’s group to hunt lease reductions of as a lot as 90% throughout a few of its remaining gyms.

In response to essentially the most lately filed accounts for Health First Golf equipment, the corporate misplaced greater than £10m within the yr to 31 March 2021, though its efficiency throughout that interval was hammered by the pandemic.

Its accounts for the next yr are actually practically a month overdue.

The majority of Health First’s operations are in London, with golf equipment in distinguished areas resembling Oxford Circus, Baker Avenue and Liverpool Avenue.

Filings present that earlier this month, Teneo Monetary Advisory was appointed administrator to Health First (Curzons) Restricted, an organization affiliated to the broader group.

Additional particulars of Mr Whelan’s proposals have been unclear this weekend, whereas the impression on jobs on the firm because of potential gymnasium closures may additionally not be ascertained.

The tycoon, who based JJB Sports activities, which turned certainly one of Britain’s largest excessive road sporting items retailers, acquired a big chunk of Health First’s UK operations seven years in the past as a part of a separate restructuring of the multinational gyms operator.

Underneath totally different possession, Health First had beforehand shed dozens of struggling UK golf equipment by a mechanism referred to as an organization voluntary association in 2013.

Using a restructuring plan relatively than a CVA to implement its newest overhaul may show controversial amongst affected landlords.

Virgin Energetic, one other gyms group, deployed a restructuring plan to drive by a monetary restructuring in 2021 because it teetered on the point of collapse.

The mechanism permits firms to ‘cram down’ collectors to drive proposals by even when they vote in opposition to them.

Mr Whelan himself has additionally skilled the sharp finish of the well being and health sector as competitors has grown, notably amongst cheaper operators.

In 2020, DW Sports activities, the chain he based in 2009 after buying 50 websites from JJB Sports activities, crashed into administration, citing the impression of Covid-19 lockdowns.

Roughly half of the corporate’s 1,700-strong workforce was saved when Mr Whelan’s rival, the Sports activities Direct tycoon Mike Ashley, engineered a deal for his Frasers Group to purchase simply over half of DW Sports activities’ websites.

The gyms business has confronted extraordinary turbulence lately, with the pandemic and hovering power prices having a marked impression on operators’ potential to generate income.

The Gymnasium Group, a London-listed chain, has seen its shares halve over the last yr, and it now has a market capitalisation of simply £185m.

Mr Whelan couldn’t be reached for remark, whereas Health First didn’t reply to a collection of emailed requests for remark despatched on Friday and Saturday.