Fitness First to sell 24 Australian clubs following restructure

Fitness First, the world’s biggest privately-owned health club chain, would not confirm a price but expectations are that the portfolio would sell for up to $50 million.

The company claims that the clubs are profitable and turn over $56 million in revenue a year.

The clubs on the block are spread across the country including nine in New South Wales, six in Victoria, five in Queensland, three in South Australia and one in Western Australia.

Fitness First's owner BC Partners recently did a debt-for-equity swap with two other private equity firms, Oaktree Capital and Marathon Capital, which in effect wiped out the gym group's $890 million debt, Fitness First Australia managing director Pete Manuel said.

Over the past three years, Fitness First Australia has been losing members to new rival gym operators including Anytime Fitness and Jetts.

“We have about 300,000 members but our membership has been decreasing by between 3 per cent and 5 per cent a year over the last three years,'' Mr Manuel said.

Fitness First has also been subject to sharp criticisms by members for its inflexible contracts and the difficulty of cancelling memberships.

But Mr Manuel said that these issues had been sorted out and that members could now easily cancel their membership by email.

BC Partners, a European private equity firm that bought Fitness First in 2005 for €1.2 billion, last year tried and failed to sell the company.