Virgin Active sells 35 gyms to focus on luxury clubs
Virgin Active is selling 35 gyms to rival Nuffield Health as it limbers up for further expansion of its range of exclusive luxury fitness clubs.
The group - which was sold to South African investment group Brait for £682 million in 2015 - said the deal would help fund investment in its range of Collection clubs offering spas and services such as shirt pressing, shoe shining and gym kit laundering.
The sale, for an undisclosed sum, will leave it with 61 clubs across the UK under plans to focus on London and other major towns and cities.
All staff and members will transfer to Nuffield as part of the sale.
Virgin Active wants to focus on three styles of gyms in the UK - its exclusive Collection chain, big family clubs and racquets clubs.
It said the Nuffield sale will allow it to pump more cash into its Collection expansion, which is seeing the group upgrade another 10 London clubs over the next few years, adding to 11 already opened in the capital and 17 worldwide.
Virgin Active is opening a new £6.5 million Collection club in Mansion House, London, later this year.
Paul Woolf, chief executive at Virgin Active, said: "T his transaction is an acceleration of our global strategy to focus on high-end clubs in metropolitan areas.
"We will have a far more focused UK business with particular strength in London, the South East and bigger towns and cities.
"It will also help accelerate investment into our UK estate, particularly as we continue to grow our UK Collection portfolio of clubs."
Details of the sale came as Virgin Active reported a 15% rise in underlying earnings to £133.5 million for 2015 on revenues 3% higher at £630.5 million.
The firm now has 276 fitness clubs around the world, with 1.5 million members, up 3% in 2015.
It added another nine clubs in the year, with recent overseas investment in southern Africa, Italy, Australia, Thailand and Singapore.
Brait bought an 80% stake in Virgin Active last year, snapping up 51% from private equity group CVC Capital Partners and 29% from Sir Richard Branson's Virgin Group.
Virgin Group retained a holding of around 20%.
Brait - controlled by South African retail billionaire Christo Wiese - also last year bought a 90% stake in high street budget fashion chain New Look and increased its holding in supermarket chain Iceland to 57%.