énergie Group chair and CEO Jan Spaticchia has hit back at reports in the Irish press about "troubled accounts" for Prime Fitness – the largest énergie franchisee in Ireland which controls eight of its 15 clubs there – saying one piece in particular was a “desk exercise” that didn’t look at the bigger picture of the larger master franchise business in Ireland.
Reports last week noted that Prime Fitness – the special purpose vehicle (SPV) set up in 2010 to take over the
indebted Irish gym chain Jackie Skelly Fitness – had filed a loss of €2.7m (US$3.6m £2.1m) last year, with one headline stating “énergie Fitness has work to do.” However, the report didn’t mention that this accounts for just eight of the 15-strong énergie Ireland estate, with those clubs in question requiring the most repair work to restore them to profitability after the demise of Jackie Skelly Fitness.
“They really haven’t looked at all the facts. To be fair, the company accounts quoted for Prime Fitness are correct as they have been taken straight from filed accounts, but they certainly don’t give the whole picture of énergie Ireland,” Spaticchia told
Health Club Management.
“Our master franchisee has invested close to €10m (US$13.4m, £7.9m) into the Prime Fitness business and is in the process of reorganising the estate, restructuring staff and has already made great progress in renegotiating sky-high rents that were struck in the Celtic Tiger times. When you acquire a business that has been neglected for many years, you can’t just swing it round like a speedboat, it’s an ocean liner which takes time to turn.
“But our master franchisee is making good progress and while there is still work to do at club level, the Prime Fitness estate loss for the first six months of 2014 was just €55,000 (US$74,000, £44,000) – a significant turnaround and I expect the franchisee will reach consolidated profit at club level by Q1 2015.”
The licence rights for the énergie Fitness, Fit4Less and énergie Fitness for Women brands in Ireland are held by Abbey Fitness and Wellness (AFW) a subsidiary of finance house Abbey International. Abbey has granted rights to the energie fitness clubs brand for eight clubs, while énergie Group – the owner of the brands – holds a small stake in the Irish business.
Spaticchia conceded that the Irish recovery from recession hadn’t been as speedy as in the UK or he’d have wanted – “Our franchisees are having to work harder for their euros than those working in pounds at the moment,” he said – but maintained énergie Ireland remains on course to
roll out a health club every quarter “The énergie Ireland business is in good shape – AFW has very strong foundations and we wouldn’t be supporting them to roll out more clubs if that wasn’t the case,” said Spaticchia, who added that a major new club acquisition would be announced by énergie Ireland in the next couple of weeks.
