LA Fitness: shaping Up

When companies find themselves in financial difficulty it is not always easy to deliver a solution that is of benefit to all stakeholders. Despite an underlying business that had strong credentials and some very good assets, LA Fitness was struggling from a legacy of high debts and significant operating costs, compounded by the high rental costs on its property portfolio. By supervising its Company Voluntary Arrangements (CVAs) we helped put the group in a position to revise the terms of its leases and proceed with its wider restructuring plans, including investing in and improving its revised gym portfolio.

As a result, both the creditors and LA Fitness are able to fix a structural issue hampering the business without going through a full trading administration; benefiting creditors, members, employees, suppliers and trade partners alike. For the landlords, the CVAs provided for a better return than the alternative of administration, and over 90 percent voted in favour of the terms. Critically, around 1000 jobs, which could have been at risk if LA Fitness entered administration, were saved. The process, with our restructuring team at the helm, should result in a leaner, more efficient business, with a long-term, sustainable future in the UK.

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