LA Fitness bullish as sales rise 9%

LA Fitness brushed aside concerns that a slowdown in consumer spending was taking its toll on the health and fitness sector yesterday, reporting a strong rise in like-for-like sales.

The group, which trumpets its value-for-money approach, said it was on track to reach its target of opening 70 clubs in the UK by next July. It opened 12 new clubs in the six months to 31 July, expanding its estate to 53.

In a trading statement which contrasted the fortunes of the mid-market clubs with their upmarket rivals, LA Fitness said like-for-like sales had grown by 9 per cent in the year to end-July. Earlier this month, Holmes Place, which is exploring a management buyout backed by the venture capitalists Cinven, said underlying sales in the last half year rose by just 3 per cent.

Richard Taylor, LA Fitness's finance director, said the difference between the premium and value operators "was now crystallising in terms of performance". He added that demand remained high for its new clubs. "We are firmly of the view, which evidence would support, that health and fitness is not a discretionary part of expenditure that consumers will cut out because of concerns of possible economic recession. It is part of people's lifestyle habits to be part of a club," he said.

The group has seen its stock-market valuation hit by poor trading at peers such as Esporta, which recently succumbed to a hostile takeover by Duke Street Capital, but Mr Taylor quashed suggestions that LA Fitness could follow the trend and delist its shares. He added that the underlying business remained strong. The group's shares rose 2p to 177.5p.

The second half saw LA Fitness open its first club on the Continent, in Barcelona. It plans to add another three by the middle of next year.