After its UK parent reported pre-tax loses of over $1 billion to its FY ending 31st October, Fitness First in Australia will looking to shed a further 120 jobs, 3% of its 4357 total staff. A cut of 77 would come from clubs and 39 from Sydney’s Bondi Junction head office, taking cuts to head office to almost 25%. All this follows the sale of almost 25 clubs.
New majority owners Oaktree Capital and Marathon Capital wiped out $850 million of debt earlier in 2012 after a debt-for-equity swap which seen the parent company Fitness First Group in better shape.
Figures posted on Thursday reported a 3.4% increase in revenue to $934 million. However, other factors including club closures saw a pre-tax loss of around $1 billion, compared to $127 million the year before.
Managing Director Mr. Manuel who joined Fitness First from Procter & Gamble 18 months ago said the last two years has seen a 5% decline in revenue and 8% decline in memberships in Australia. Weak consumer spending and the continuing increase of 24 hour gyms operating with fewer staff has hit the company hard.
A restructure and refocus towards customer service is planned to “get Fitness First back into great shape” with administrative services moving online and a conversion of part-time staff to full-time.
“We are absolutely putting ourselves in a different part of the category [from the budget gyms]. We are saying we care about the fitness journey that our members will be on and the role of my staff is to motivate, educate and celebrate and support everybody.
“The choice that we’re making is really a choice in investing in fitness services.”