Low-cost gym chain set to appoint administrators
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.