Whitbread, the hotels to leisure group, will double the number of its David Lloyd Leisure clubs to 100 over the next five years and at an estimated cost of £500m.
Whitbread, which has sold off its brewing and pubs businesses to focus on hotels, restaurants, and leisure, plans to open eight clubs next year, mainly in the South. The 52 new clubs are expected to yield 500,000 members.
Analysts were surprised at the timing of the announcement, given the deteriorating state of the British economy. One said: "The subsector is in for a tough time. Whitbread would do better to wait for six months and then start snapping up the competition."
Stewart Miller, managing director of David Lloyd Leisure, said there was "clear room for expansion ... in a sector that is growing at around 25 per cent a year". His aim is to make the company a household name in health and fitness. Around 5 per cent of the population belong to a gym, compared with 12 per cent in the US.
Whitbread has no plans to follow the likes of Fitness First across the Channel, although one of its 42 clubs is in Dublin. A spokesman said: "Our focus is on the UK where we see great opportunities, but we are keeping our eyes on Europe."
Whitbread is also preparing to sell its cheaper, London-based Curzon gyms as part of its drive to focus on David Lloyd Leisure and increase the 12 per cent that the business currently contributes to group profits. Like-for-like sales at the health and fitness clubs are growing by around 10 per cent, the company said.
Whitbread shares closed up 2p at 645p.
Separately, Esporta, a small-cap health and fitness operator, sold two non-core Espress clubs in London to Top Notch Health clubs for £2.2m, to focus on developing its chain of large, family-orientated clubs.Reuse content