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LA Fitness to sell 33 gyms to cut its debts

LA Fitness wants to sell its gym on Moreton Hall l ENGANL00120130821135239

LA Fitness wants to sell its gym on Moreton Hall l ENGANL00120130821135239

LA Fitness is selling its Bury St Edmunds gym as part of a national restructuring of the company to cut its debts by £250 million.

The Bury gym is among 33 gyms it is selling out of the 80 its runs. It does not own the Easlea Road site, so is looking for a buyer for the lease on the gym.

A spokesman said: “We are looking for the operator that’s best for the site. We’re looking for gym operators who can take on the staff and take on the members.

“All that will change is the name over the door.”

But he said that if a new owner substantially changed the facilities it would be a contract change so members would be entitled to refunds.

As well as the sales, the group has proposed ‘landlord Company Voluntary Arrangements’ . A CVA is a voluntary arrangement with creditors to rearrange loan repayment, but landlord CVAs only relates to landlords, not other creditors.

If approved, the CVAs will revise lease terms at a number of its clubs and, LA Fitness says, pave the way for the an agreed restructuring package to reduce its debt burden by around £250 million.

Martin Long, LA Fitness chief executive, said: “We have had a good start to 2014 and our membership numbers are up year-on-year.

“It is a structural issue that is hampering LA fitness and it is through this process that we will create a leaner, more operationally efficient business, with a long-term, sustainable future as one of the UK’s leading health and fitness operators.”

The group’s statement said: “These proposals will have no immediate impact on the day-to-day running of the business for members, employees, suppliers or trade partners.

“The clubs that the Group is selling as part of the CVA proposals will continue to operate as normal in the near-term and every effort will be made to ensure that members are unaffected.

It is proposed that Deloitte will supervise the CVAs. Detailed CVA proposal documents have been made available to LA fitness creditors who will vote on the proposals on March 24.

 

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