Frasers buys DW Sports assets for £37m

DW Sports entered administration earlier this month, placing over 1700 employees at risk, blaming the impact of the coronavirus pandemic.

The deal excludes DW business names and intellectual property. Frasers, which owns the Sports Direct brand, could pay up to an extra £6.9m contingent upon the number of leasehold interests eventually acquired.

“The transaction compliments the existing gym and fitness club portfolio within the company's group and is consistent with the group's elevation strategy,” Frasers said on Monday.

“Frasers Group looks forward to elevating the gym and fitness assets … under the group's existing iconic Everlast brand, and is also pleased to have saved a number of jobs.”

In its last accounts, for the year to March 31, DW had gross assets of £195m and made a loss of £20m. The company was founded by former Wigan Athletic football club owner Dave Whelan, operated 73 gyms and 75 retail sites across the UK but announced plans to shut 25 of its stores last month.

The company said that, having “exhausted all other available options,” it believed that the administration process could allow it to restructure the business and protect the “maximum number” of jobs.

DW Sports Fitness was founded in March 2009 when Whelan purchased around 50 JJB Sports fitness clubs and retail stores for around £83m.

The company said in April that its monthly revenue had fallen to zero overnight during the pandemic, down from an average of £15m a month.

Frasers last week reported a 20% fall in full-year pre-tax profit to £143.5m as it was forced to close stores during the lockdown imposed in March.