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DW Sports falls into administration

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Written by: Emma Lunn
03/08/2020
Sports retailer and gym group DW Sports is to go into administration, putting 1,700 jobs at risk.

The company, which is the second largest operator of gyms in the UK, said it plans to appoint insolvency specialists on Monday after its income was wiped out by being forced to close it shops and gyms during lockdown.

DW Sports operated 73 gyms and 75 retail sites across the UK but announced plans to shut 25 of its stores last month.

It has said it will now wind down its retail business for good, with closing down sales at its remaining 50 stores.

Its website has already ceased trading with visitors seeing a message saying: “Our site is temporary offline for maintenance.”

The group’s fitness clubs typically include a large gym floor and functional training areas, member cafes, a swimming pool, and group exercise classes.

DW Sports was established in 2009, when Dave Whelan bought 52 fitness clubs and attached retail stores from JJB Sports Plc, a company he had built up before selling in 2007.

DW Sports acquired Fitness First UK in September 2016, increasing its portfolio to include Fitness First clubs.

Fitness First will continue to operate as a separate company and its 43 health clubs will be unaffected by the administration.

DW Sports’ administrators intend to support employees, customers and gym members as far as possible while they look to secure a buyer or buyers for some or all of the DW Sports portfolio.

Gyms have been able to reopen in England since 25 July. Most gym companies, including DW Sports, froze membership fees while facilities were closed.

To date, 59 of DW Sports’ gyms have reopened in England and Northern Ireland, but a further 14 sites in England, Scotland and Wales have been unable to open due to government restrictions.

Martin Long, DW Sports chief executive, 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.

“The decision to appoint administrators has not been taken lightly but will give us the best chance to protect viable parts of the business, return them to profitability, and secure as many jobs as possible.

“It is a difficult model for any business to manage through without long-term damage, and with the limited support which we have been able to gain.

“Having exhausted all other available options for the business, we firmly believe that this process can be a platform to restructure the business and preserve many of our gyms for our members, and also protect the maximum number of jobs possible for our team members.”

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