Pure Gym is the reported frontrunner in a three-horse race to buy LA fitness for £80m, with Fitness First and Sports Direct Fitness also in contention.
Pure Gym, which yesterday (30 March) announced
bumper profits for 2014, is in “advanced” talks to acquire LA fitness, according to
The Sunday Times. The paper cited City sources as saying any deal between the parties would be decided by the end of April.
When contacted by
Health Club Management, both Pure Gym and Sports Direct Fitness declined to comment, while Fitness First did not immediately respond.
LA fitness last year appointed Canaccord Genuity to find new backers for the business – which comprises 44 sites nationwide. The chain has scaled down in recent years, shedding 33 clubs as part of its
CVA (company Voluntary Arrangement) – with Pure Gym and
Sport Direct Fitness having snapped up a large share of these. Despite the smaller portfolio, LA fitness possesses an enviable property footprint in London, where it has reported success with its new
‘premiumised’ LAX brand of clubs.Speaking to
Health Club Management in November, LA fitness CEO Martin Long said the main LA fitness shareholders are currently the banks that saw the chain through its CVA. He added: "They’ve been fantastic supporters, but they aren’t the long-term holders of the business."
Of the potential LA fitness suitors, Fitness First would be the most obvious bedfellow given that both chains see themselves as upper mid-market propositions. That said, Pure Gym has made no secret of its
desire for a greater London presence, although how it would bridge potential pricing gaps remains to be seen. Pure Gym currently charges members between £9.99 and £25.99 per month (depending on location), whereas LAX club members in London typically pay upwards of £60 per month.
One well-placed industry observer, who declined to be named, said they would not be surprised if the remaining LA fitness clubs were split between two or more suitors, given both the desirability of the London sites and the strong presences of Pure Gym and Sports Direct Fitness in the north of England – where LA fitness also retains a number of health clubs.
