Fitness First trains sights on LA fitness London clubs
by Jak Phillips | 16 Apr 2015
Fitness First Group CEO Andrew Cosslett wants the chain to be a premium proposition throughout London
Fitness First remains firmly in the running for the £80m race to capture LA fitness, amid hopes that a successful deal would help it corner the lucrative London market.
Fitness First global CEO Andrew Cosslett has previously said the chain wants to be the Audi A4 of health clubs, offering a premium proposition in high density urban centres. The group hopes to replicate recent successes in Asian cities like Hong Kong with a full-scale tilt at the UK capital.
LA fitness boasts an enviable property footprint in London with 22 sites, including two ‘premiumised’ LAX clubs, which have reportedly enjoyed initial success. A well-placed industry source told Health Club Management that the lure of LA’s London presence would see Fitness First pursue the deal up to its conclusion, despite the need for additional investment in a number of LA sites.
Fitness First is currently in discussions to sell its German arm for just under £200m (US$323m €253m) and Health Club Management understands that partial funds from a successful sale could be used in a bid for LA fitness. An outcome to the German talks is expected to be announced next week.
Competition has been hotting up in recent weeks as a number of players indicate interest in the 44-club LA fitness portfolio. Health Club Management understands that Pure Gym and Sports Direct Fitness remain in contention, while Sky News reported yesterday that Terra Firma Capital Partners – led by private equity investor Guy Hands – has also lodged a bid.
One potential stumbling block for Fitness First – especially in light of last year’s failed merger between Pure Gym and the The Gym Group – could be the Competition and Markets Authority, which has previously taken the view that the UK gym market is separated by pricing sectors. Given that Fitness First and LA fitness occupy a similar space in the market, one option thought to be under consideration would be a joint bid with Pure Gym for the portfolio. Such a scenario would see a division of the business between two or more chains, as was forecast in a Health Club Management report last month.
All bids for LA fitness are due to be finalised in the coming weeks, with a deal expected to be announced by the middle of May.
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Fitness First remains firmly in the running for the £80m race to capture LA fitness, amid hopes that a successful deal would help it corner the lucrative London market. Fitness First global CEO Andrew Cosslett has previously said the chain wants to be the Audi A4 of health clubs, offering a premium proposition in high density urban centres. The group hopes to replicate recent successes in Asian cities like Hong
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