Duncan Bannatyne, CEO of Bannatyne Group, which runs spas, health clubs and hotels, says the coronavirus shutdown could cost the company £30m.
Speaking to Sky News on 7 April 2020, he said Bannatyne's bank – Royal Bank of Scotland – is supporting the business and that it will take on more borrowing under the government scheme to get through the crisis.
The company has furloughed 2,600 staff and has 400 still working. Bannatyne said it made up wages to 100 per cent in March, but that these would drop to 80 per cent thereafter. The senior team has taken a substantial pay cut. He was not asked about the impact of the shutdown on freelance staff.
The company has not paid its rent and has agreed with landlords to change to monthly, rather than quarterly, rent payments as soon as banking facilities kick in, to ease cashflow.
Bannatyne said the company will reopen all profitable sites once the shutdown is over, but will permanently shutter loss-making locations – he said he expected other operators to do the same, meaning the industry will inevitably see a shrinkage in the number of sites operating.
Members who had paid for the month of March but who lost days to the closures were being offered the chance to roll the lost days over - they have been 'very very good about it', he said.
The Bannatyne team is modelling the impact of both four- and six-month closures, so the company is prepared, he explained.
The prospect of reopening too early and having to close again would be hugely damaging, said Bannatyne, stressing the importance of timing reopening carefully.
Bannatyne
took back the reins of the business last summer, following the departure of CEO Justin Musgrove, who left to
take up a position in the Middle East with Leejam, the largest fitness operator in Saudi Arabia.
Bannatyne Group has a portfolio of 72 health clubs, 47 spas and four hotels, and reported a turnover of £127.5m in the year to December 2018 – its most recent results.
This figure represents growth of 8.5per cent on its 2017 results (£117.6m). Profit improved slightly, from £14.3m to £14.6m between the two years.
