Gym chain LeisureCo set to transfer health clubs to new managers

The administrator of collapsed gym and health club operator LeisureCo has managed to save three of the chain’s seven remaining centres, by transferring management back to the centres’ owners.

LeisureCo managed eight gyms, mainly on behalf of local councils. One of these management contracts was cancelled prior to the appointment of administrators last week.

Under arrangements made by administrator Michael Basedow of Pitcher Partners, four of the remaining seven management contracts will be cancelled or terminated. The effected centres include those in Mt Gambier, Numurkah/Moira, Whyalla and Wyong.

But in brighter news, Basedow has been able to strike a deal with the Canada Bay and Hurstville Councils to transition management of the Five Dock Leisure Centre and Hurstville Aquatic and Leisure Centres to the councils, or other available operators.

Basedow says the transition is “well under way” and remaining facilities will be prepared to transition management “over the next week”.

“Certainly for the employees this is a good outcome as they get to keep their jobs, as well as members of the various leisure centres and local councils because they can keep these facilities open.”

Basedow says small, independent gyms should take note of LeisureCo’s recent problems and ensure they get on top of their business in order to survive the downturn.

“LeisureCo was based on critical mass and once a few of these centres were either handed back to the local councils or new managers, prior to my appointment, the critical mass of the group was diminished. Because it’s a predominantly cashflow-based business, the lack of cashflow put pressure on it.”

“This is the same principal in any business, you need to be on top of your financial position and you need to be able to increase your membership base if that’s waning. You need to encourage new members, and when it comes down to it, it’s all about providing a quality service.”