Pure Gym to buy rival LA Fitness

Pure Gym, the UK's largest gym operator, has bought rival workout chain, LA Fitness BBC reports.

Pure Gym has not disclosed the value of the takeover but it is around £60m-£80m, said a source close to the deal.

LA Fitness and its 43 clubs, based predominantly in London and South East England, will add to Leeds-based Pure Gym's 98 clubs.

LA Fitness was taken over by its lenders in 2014, who then put the business up for sale.

Pure Gym has grown considerably since opening its first sites in Leeds and Manchester in November 2009.

It plans to open 30 more gyms this year in addition to the clubs acquired from LA Fitness.

Mid-market operators such as LA Fitness have struggled to compete with Pure Gym and other budget chains.
Competition

"Overall demand for affordable, high quality, and no-contract fitness centres is continuing to grow, served by a range of providers in a highly competitive marketplace," said Pure Gym chief executive Humphrey Cobbold.

The LA Fitness takeover has been submitted to the Competition and Markets Authority (CMA) for review, and may face some resistance from the regulator.

Pure Gym's attempted merger with discount rival The Gym Group last year was abandoned after its first application was blocked by the competition regulator.

The regulator may look more favourably on Pure Gym's latest deal as most of its gyms are located outside London, says senior leisure and media analyst at Mintel, Michael Oliver.

"The geographical spread could help," he said. "Pure Gym is based in the north of the country and LA Fitness is concentrated in London."
Suitable sites

Pure Gym plans to spend money on refurbishment and rebrand most of the LA Fitness sites.

Buying up an ailing fitness chain is a quick way for Pure Gym to secure suitable sites for its expansion, says Mr Oliver.

"In the last five years it's become very hard to find suitable sites," he said.

The acquisition ends "a period of uncertainty" for LA Fitness, according to Martin Long, its chief executive.

"We are pleased to have secured a new long-term owner in Pure Gym."