National gym chain Xercise4Less has entered administration, appointing Toby Underwood and Rob Lewis of PwC as joint administrators.
Xercise4Less operated under its parent company Topco Limited and was based in Leeds.
Very shortly after the administration, the administrators arranged to discuss the option of putting up the distressed business for sale and a subsidiary of JD Sports Gyms Limited (JDG) stepped forward.
Unsurprisingly, the COVID-19 pandemic was cited as a major cause of the distress. Indeed, the business reportedly faced “financial difficulties caused by an increasing competitive market, which was exacerbated by COVID-19”.
From the available details regarding the distressed business sale, the acquirer has picked up valuable assets – including some 250,000 customer memberships – that were part of a previous sale plan.
Restructuring specialist Alan Fort was appointed back in May at which point a spokesperson said that the decision was taken to seek additional funds with “the best way of achieving this being to begin a sale process”.
Mr Underwood, one of the administrators, commented: “Following our appointment, we immediately completed a sales process that had been running for some time.
“This sale puts the ongoing business on a firmer financial footing and JDG will be working with the existing team to continue to grow and develop the new business.
“We are delighted that, in these extremely challenging circumstances, all employees have transferred to the purchaser.”
Alun Peacock, managing director of JD Sports Gyms, added that the business is “delighted to have completed this acquisition which enhances our position in the highly competitive gym market and which will ensure the continued employment of many hundreds of people”.
The deal comes just ahead of the re-opening of the UK’s gyms and leisure centres. On the 9th July, the Government announced that indoor gyms, pools and leisure centres can reopen to the public on 25th July.
The reopening plan includes a number of restrictions, including limits on the number of people able to use a facility at any one time and reduced class time – all of which will be something the new Xercise4Less owners will need to take into consideration.