High-end New York fitness center chain Equinox on Thursday said that it plans to acquire the assets of struggling L.A. competitor Sports Club Co. for an undisclosed amount.
The deal includes four Sports Club/LA locations in Los Angeles and Orange counties and New York’s Rockefeller Center, growing Equinox to a chain 56 clubs in the top eight U.S. markets. Equinox plans to change those clubs over to the Equinox brand over the next six months and make multi-million dollar upgrades.
Separate Sports Club/LA clubs in several other markets will continue to be owned and operated by Millennium Partners Sports Club Management. Millennium Partners’ principals were large Sports Club shareholders who bought the clubs in 2005 after a management shakeup. The clubs are in Boston, Miami, San Francisco, New York on the Upper East Side and Washington D.C., as well as Reebok Sports Club/NY.
Founded in 1979, Sports Club/LA was considered a pioneer in the “urban country club” concept, combining sports and fitness options with the amenities of a high-end resort. The company’s finances had been struggling even before the recession, but had begun recovering in recent months, with revenue up 5 percent to $14.2 million in the second quarter. Even so, the company reported a 5 cent per-share loss, compared with 2 cents net income a year earlier, on higher debt and other payments.
Ronald K. Fujikawa of Greenberg Glusker was legal counsel to Sports Club/LA in the transaction.
Shares of Sports Club Co. jumped 20 cents, or 130 percent, to 35 cents in midday trading on the Pink Sheets.