SOUTH LONDON GYM
Based in South London, this impressively equipped gym spread over 16,000sq ft offers a spacious gym floor, multiple exercise studios catering to yoga, strength, boxing and a large group classes and offers over 60 classes a week with flexible membership options. In addition to the studios, the premises operates a sauna in each of the well-appointed male and female changing rooms and has two small massage & beauty treatment salons.
As a result of the Covid-19 pandemic, the gym has only operated for c110 days out of the last 365 and although the intention was to reopen and continue trading once the Government restrictions were relaxed, a non-negotiable demand from the equipment finance company for the full repayment of the c£270,000 arrears on the leasing agreement has caused the Director to put the Company into administration (having been in a CVA for the previous 3 years). With the current value of the equipment being less than the value of the outstanding finance, it is likely that arrangements will need to be made for the return of the equipment in early course of the administration. Interested parties will need to be aware that it is very likely that they will need to re-kit the entire gym. Furthermore, current rent and service charge arrears including the March ’21 quarter are c£445,000 (+ VAT) and no agreement has been reached as yet with the landlord as to how to deal with the arrears or future rental payments should the gym reopen. This is likely to be vital to any purchaser as gym membership has fallen by approximately 2/3rds since March 2020 to c500 members which is not viable in the medium to long-term as contractual rent alone is over £300,000 per annum.
The gym is not currently allowed to trade under Government regulations but the Joint Administrators do intend to bring a number of staff off furlough to enable the business to trade from 12 April (subject to the Government not amending its timetable for re-opening and suitable arrangements being made with both the landlord and the leasing company). They have engaged Williams & Partners Ltd to find a buyer for the business and goodwill out of administration as a going concern, or alternatively to find a buyer for the assets on a break-up basis (although we note that that at cost c£315,000 out of the £375,000 worth of equipment is encumbered).
If you are interested to know more about the above opportunity, we are able to offer a short period of time to undertake a limited amount of due diligence. However, please note that offers must be received by no later than 12:00pm on Monday 26 April 2021 with a sale concluded by no later than close of business on Friday 30 April 2021 and therefore only parties that are able to work within this timeframe should respond. Williams & Partners Ltd reserves the right to close the bidding early or extend the deadline, without notice or liability.
Preference will be given to companies currently within the gym or wider leisure industry as we would consider that knowledge of the industry is essential to the future success of the business.
Due to the confidential nature of this sale, interested parties will be invited to sign a non-disclosure agreement before further details can be released.
If you are interested in finding out more about the above opportunity, please contact us. Parties indicating an initial interest within 48 hours of the offer closing date may not receive a response.