By Ed Atwood
Dubai-based retail giant buys out gym chain franchise from Saudi Arabian conglomerate Al Hokair Group
Landmark Group, the Dubai-based retail giant, has acquired the Fitness First franchise for the Middle East region, after snapping up a subsidiary of the Saudi leisure conglomerate Al Hokair Group.
The 100 percent buyout of Leisure Unlimited, the previous franchisee, was carried out by the group’s investment arm, Landmark Investments.
Under the terms of the deal, Landmark will absorb all Fitness First assets and employees in the Middle East.
Talks between Al Hokair Group and Landmark Group were first reported by Arabian Business in July.
“We are excited about this very significant expansion of Landmark Group into the health and fitness segment” said Micky Jagtiani, chairman of Landmark Group, which claims a turnover of $3.8bn.
“Fitness First is a globally recognised brand… that fits perfectly into our fast growing cluster of retail and hospitality brands.”
The local Fitness First franchise consists of 16 outlets in Bahrain, Qatar, Jordan, Saudi Arabia and the UAE, which has 11 branches.
The largest privately-owned health club group in the world, Fitness First is owned by private equity group BC Partners, and has 550 clubs worldwide with more than 1.4 million members in 20 countries.
A source close to the Landmark-Al Hokair deal said that Dubai-based Leisure Unlimited had been starved of funding in recent months, putting pressure on its growing gym business.
Buyout talks with at least two previous firms are understood to have had fallen through.
The Landmark deal follows a legal spat between the UK-based Fitness First and its franchisee Leisure Unlimited, which in May saw the gym chain take out an advertisement in a UAE newspaper for a new franchisee.
Leisure Unlimited is understood to have sought legal advice after the move, but the dispute has now been resolved to allow the unit to be sold with its franchise relationship intact, the source said.
Landmark Group is one of the largest retail conglomerates in the region, with more than 900 stores and some 31,000 employees.For all the latest UAE news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.