Backed by Quadrant Private Equity and major US firms, Fitness and Lifestyle Group is now extending its financial runway after completing a critical refinancing deal. However, the long-term recovery of the gym operator, heavily affected by the pandemic, still depends on whether strong growth can offset more than $2 billion in debt. The company, which owns Fitness First and Goodlife Health Clubs and operates other gym chains across the Asia-Pacific, posted a $161.2 million loss for the financial year. This marks an improvement on the previous year’s $215.1 million deficit but shows the group is still operating at a loss.
Although memberships are rising and consumer demand is returning, the business continues to carry a combination of bank loans, mezzanine financing and preference shares. These liabilities date back to the forced closures and revenue collapse during the 2020 lockdowns. According to the latest filings, the group holds nearly $2.2 billion in debt, caused by borrowing heavily before Covid-19 and enduring lengthy shutdowns while fixed costs accumulated.
The refinancing, completed last month, shifts major repayment deadlines from 2026 to 2028. This move reduces interest expenses and improves cash flow. The changes have boosted confidence among the group’s lenders and investors, with auditors confirming the business is now viable for at least the next 12 months under the new structure. The aim is to stabilise its immediate financial footing, helping the company avoid a cash crunch while it works to turn the business around.
Operationally, the company has continued to grow. It is now the largest corporately owned fitness business in the Asia-Pacific region, with over 330 locations and more than 600,000 members. It has tapped into the growing consumer focus on premium wellness, social-based workouts and hybrid offerings that combine in-person training with digital access. Memberships, revenue and cash flow are reportedly at record levels, and the group is introducing new technology and wellness-focused services.
However, not all areas are performing well. The company exited its Vietnam operations this year and reported a $7.1 million write-down related to its Emily Skye brand. Despite promoting innovation and wellness trends, the challenge remains whether revenue generated from new services and growing memberships can consistently exceed its substantial financial commitments.
These difficulties are not unique. Other health and lifestyle businesses backed by private equity have also encountered challenges, particularly those acquired during a period of low borrowing costs. Rising interest rates and increased scrutiny of underperforming assets are placing significant pressure on private equity firms. Some comparable businesses have brought in restructuring teams while others have defaulted.
Fitness and Lifestyle Group now appears focused on gaining time. The added liquidity and delayed repayments give it room to breathe, but achieving profitability and significantly reducing its debt will require sustained momentum, especially as other companies in the sector face similar recovery issues.
