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DW Sports leads the way for Fitness First acquisitions – but four more operators remain in the hunt

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The long-running saga of the sale of Fitness+First'>Fitness First’s UK clubs looks to be in its final act, as up to five operators are understood to have completed separate deals to buy out the nearly 70-strong portfolio – with DW Sports leading the way.

The deals, expected to be confirmed by Fitness First owner Oaktree Capital later this month, will see Fitness First carved up by DW Sports, The Gym Group and GLL (Greenwich Leisure Ltd), while other firms are circling.

DW Sports, owned by multimillionaire Dave Whelan, is expected to pick up a total of 63 clubs, nearly doubling its existing number of clubs operated under the DW Fitness banner.

Whelan confirmed the business is “getting 63 health clubs which are mainly in the south of England where we do not have so much of a presence” in an interview with the Wigan Evening Post.

With DW Sports boasting a strong selection of northern locations and Fitness First having a significant presence in affluent areas of the south – particularly London – a successful merger would see the UK’s second largest health club chain boast an enviable spread of sites.

The former Wigan Athletic chair also said he “wasn’t expecting any trouble from the competition people” in terms of the deal, with the geographical differences between DW Sports and Fitness First reducing the likelihood of intense scrutiny from the Competition and Markets Authority (CMA), which previously proved the downfall of a proposed merger between Pure Gym and The Gym Group.

If the deal goes through, it will immediately make DW Sports – which has around 80 sites – one of the largest private gym chains in the UK, rivaling current market leader Pure Gym, which currently has more than 160 clubs.

Announcing its interim results last week, The Gym Group confirmed it had “exchanged contracts on four sites from another operator” and looked to bring them online following rebrands in early 2017 – these are thought likely to be from the Fitness First portfolio.

When Health Club Management asked if the sites were being acquired from Fitness First, The Gym Group CEO John Treharne declined to comment, although he added: "Part of our strategy is that we acquire sites from other operators.”

The Gym Group currently has more than 80 sites nationwide, with six gyms opening so far this year.

It is unclear how many sites leisure trust GLL will pick up. The group currently operates more than 250 sites under its “Better” brand.

The sale of the UK arm of Fitness First will be the first step in the long-anticipated break up of the 370-strong global business. Owner Oaktree Capital Management is likely to sell the rest of the clubs – in Asia, Australia and Germany – after the UK deal is completed.

The sale of clubs which are peripheral to the core business had always been the plan under Fitness First’s ongoing 'optimisation strategy'.

This has seen the operator streamline from its peak of 165 clubs in 2012, as it worked to adapt to shrinkage in the mid-market.

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The long-running saga of the sale of Fitness First’s UK clubs looks to be in its final act, as up to five operators are understood to have completed separate deals to buy out the nearly 70-strong portfolio – with DW Sports leading the way.
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