After much speculation, Dave Whelan, Founder of JJB Sports has won the race to secure the fitness clubs division with a price of £83.50 million (£1.5 million per club). The funds will be used to pay down the company’s bank debt. JJB Executive chairman Sir David Jones said:
‘We have taken the first step in securing JJB’s long-term future after months of speculation. We have worked very hard with our advisers and lending banks to propose a robust, solvent restructuring of the Group that we believe is in the best interests of all of our stakeholders.’
Whelan’s new company is DW Sports Fitness. The corporate strategy is to develop around 100 combined sports retailing and fitness outlets, following the JJB business model.
I was surprised to hear that the final price had exceeded £80 million, as the online rumour was that the price was going to be below £50 million. I had coffee with one of the unsuccessful bidders last week who was disappointed with the outcome, as they felt that JJB’s 54 clubs would have integrated neatly into their existing club portfolio.
It will be interesting to follow how these independently operated clubs will trade, given that most share retail space with JJB Sports, whose future remains uncertain.