STRUGGLING health club chain Fitness First has been forced to sell a quarter of its Australian gyms as part of a restructure to wipe $890 million of debt from its British parent company.
Fitness First Australia is a division of the global company Fitness First Group, which is undergoing a debt-for-equity swap with lenders Oaktree and Marathon.
The lenders have agreed to write off all the company's debt for an equity stake.
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The company, which will also shed clubs in Britain, has been hit by weak consumer spending and the rise of budget gyms. It is believed the Australian arm brings in more than 50 per cent of profits, despite accounting for only 25 per cent of clubs.
In an announcement yesterday, the company said it was selling 24 of its 97 clubs across the country that were underperforming to help improve its balance sheet.
Read more: Fitness First slims down to trim debt