Low-cost gym chain set to ap­point ad­min­is­tra­tors

The Daily Telegraph - Business - - Business - By Laura Onita

A LOW-COST gym chain set up by a former Har­lequins rugby for­ward has filed a no­tice of in­tent to ap­point ad­min­is­tra­tors.

Leeds-based Xer­cise4Less has about 50 sites across the country. It was put up for sale in May by its in­vestors and share­hold­ers, in­clud­ing the Busi­ness Growth Fund and Proven­tus Cap­i­tal Partners.

The move is meant to pro­tect it from cred­i­tors while it fi­nalises a deal to over­haul the struc­ture of the busi­ness this week. It is work­ing with ad­vis­ers at PwC.

Xer­cise4Less was founded by Jon Wright, who used to play rugby for Har­lequins un­til he got in­jured and left the sport. The busi­ness posted sales of £40m and losses of £10.4m in its most re­cent set of ac­counts at Com­pa­nies House. Its losses widened from £8.8m the year be­fore.

In Oc­to­ber the busi­ness raised more money from its share­hold­ers and lenders to help it press ahead with a turn­around. It flagged that gyms are in­creas­ingly of­fer­ing flex­i­ble mem­ber­ships, which makes it more dif­fi­cult to stay com­pet­i­tive.

A spokesman for the com­pany de­clined to say if some of its branches could shut per­ma­nently in a pre-pack ad­min­is­tra­tion, a con­tro­ver­sial form of in­sol­vency that would sell the busi­ness back to re­lated par­ties shorn of its debts.

Gyms, leisure cen­tres and swim­ming pools are pre­par­ing for a likely re­open­ing date on Satur­day af­ter months of in­ac­tiv­ity.

Gyms were for­mally closed on March 20, al­though there had al­ready been a steep fall in ac­tiv­ity be­fore as the spread of coro­n­avirus gath­ered pace. There was a 400pc rise in the pur­chase of home gym equip­ment in early April, with ex­er­cise bikes and el­lip­ti­cal train­ers prov­ing most pop­u­lar.

Most gym mem­ber­ships have been paused since, but re­cent re­search has shown that al­most 88pc of mem­bers plan to re­turn once they re­open.

Just two years ago the com­pany said it planned to double in size and open about 100 sites by 2021. Its chief ex­ec­u­tive Peter Wright left the com­pany in Jan­uary 2020.

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