| News & Know How | News
Spectrum Sheds 11 San Antonio Clubs Buyer Gold’s Gym gains greater presence in the market
n February, the Spectrum Athletic Clubs, based in El Segundo, California, announced that it was selling its 11 clubs in the San Antonio, Texas, area to Gold’s Gym International, Inc. (GGI), based in Irving, Texas, for an undisclosed price. The deal was expected to close by the end of the month. Spectrum is owned by Brentwood Associates, a private-equity firm based in Los Angeles, which acquired the club chain in 1999. For 2010, Spectrum had revenues estimated at $90 million. Bud Rockhill, the president of Spectrum, told The Los Angeles Times that the San Antonio market was becoming saturated, limiting potential growth in the area. As a result, the company now intends to focus on Southern California, where it plans to add new locations to the 12 clubs it already operates there. “This transaction has only a positive impact on our clubs in California,” he said.
I
GGI’s acquisition of the San Antonio clubs gives it a total of 20 in that market. “We’re pleased to bring these 11 Spectrum Clubs into the Gold’s Gym family and feel this acquisition was a natural fit,” says Jim Snow, the president of GGI. “Both our organizations are built around a strong culture of service and a brand promise of delivering an outstanding fitness experience to our members.” —|
Fitness First Grapples with Its Debt Oaktree Capital attempts to capitalize on situation
he (London) Financial Times reports that Oaktree Capital, an investment fund that spe- cializes in distressed debt, is seeking
T
to acquire control of Fitness First, the largest privately owned health club company in the world, which has been struggling to deal with approximately $955 million in debt.
In February, BC Partners, the London-based private-equity firm that acquired Fitness First for more than $950 million in 2005, reported that it might fail to meet a $28.5 million interest payment due to debt- holders in March.
In an attempt to bring its massive bank loans under control, the company sold all of its clubs in Italy, Spain, and the Benelux countries in 2010; attempted, unsuccessfully, to sell other of its assets last year; considered going public on the Singapore stock exchange, which it hoped would raise $460 million, but withdrew the offering because of market volatility; and, most recently, has sought to restructure its debt. Oaktree already owns more than one-third of Fitness First’s debt and is attempting to increase its share, hoping to swap its holdings for an equity stake in the company. In February, Oaktree acquired $58.7 million in Fitness First loans.
Fitness First, which has nearly 430 clubs serving more than 1.2 million members worldwide, has been hurt, in part, by a slowdown in con- sumer spending and the emergence of low-cost competitors. —|
20 Club Business Internat ional | APRIL 2012 |
ihrsa.org Former Club Owner
Imprisoned for Fraud “Candy” Tang maintains her innocence, plans to appeal
> In early February, former club owner Tang Ya-chun “Candy” Tang reported to the Taipei District Prosecutors Office in Taipei, Taiwan, to begin serving a 22-month prison term for fraud. Tang was the
Candy Tang in 2004
founder, president, and CEO of the Alexander Group, based in Taiwan, which was once one of the largest and most successful club chains in South Asia. In 2004, when Tang was interviewed by CBI (see “CBI Inter- view,” December
2004, pg. 37), the company had 33 facilities. In 2007, the Alexander Group suddenly
shuttered all of its locations and went out of business. At the time, the chain had some 10,000 members and 2,000 employees, according to The China Post. Authorities charged that Tang and her
younger sister, Hsin-ru, facing financial diffi- culties, but unwilling to declare bankruptcy, had borrowed money though “underground channels,” which had generated a staggering amount of bad debt. And, rather than alert customers about the company’s problems, they, instead, had reduced membership fees, converted to a prepaid format, and continued to advertise to new members. In all, the government said, members had
lost some $10.9 million. Found guilty of defrauding members, Tang
was originally sentenced to five years impris- onment, and her sister, to four. They appealed the verdict, and, after the case was reviewed by the Taiwan High Court, their sentences were reduced to 22 months and 16 months, respectively. Hsin-ru has also begun to serve her sentence. Candy Tang still maintains that she “abso-
lutely did not commit fraud” and plans to file an extraordinary appeal with the country’s justice ministry. —|
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134