Tue, 04 Aug 2020 | ADMINISTRATION
Sports retailer and gym operator DW Sports has said it is poised to enter administration, due to the impact of the mandated closure of its store portfolio and gyms during COVID-19 lockdown. The company will work with administrator BDO to save as many of its 73 gyms as possible, but all 75 stores will close.
DW Sports, which was founded by former Wigan Athletic owner Dave Whelan, had already announced the closure of 25 of its stores last month and the remaining 50 will now enter closing-down sales.
The company hopes that a restructuring process will enable it to save as many gyms and jobs as possible, but added that the closure of some gyms was “inevitable”. 59 of the group’s UK gyms have reopened, with the remaining 14 unable to due to government restrictions. DW Sports says its sister company Fitness First, which operates 43 clubs, is unaffected by its administration.
Administrators say they hope to supports employees, customers and gym members as far as possible while seeking a buyer or buyers for as "much of DW Sports' business as can be achieved."
Chief Executive Martin Long said: “As a consequence of COVID-19, we found ourselves in a position where we were mandated by government to close down both our retail store portfolio and our gym chain in its entirety for a protracted period, leaving us with a high fixed-cost base and zero income”.
“Like many other retail businesses, the consequences of this extremely challenging operating market have created inevitable profitability issues for DW Sports.”
Long added that appointing administrators gave the company “the best chance to protect viable parts of the business, return them to profitability, and secure as many jobs as possible.”
The group’s most recent available accounts were to the year ending March 31 2019. DW Sports reported fixed assets valued at £146.9 million, with current assets of £43.6 million, net current liabilities of £58.7 million and net assets of slightly over £55 million.
The group reported turnover of £222.2 million for the year, down from £222.9 million the year prior, with fitness clubs generating £137.9 million and retail stores £84.3 million.
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