Fitness equipment business Workout World has collapsed into administration less than a month after finalising a deal to sell its key assets to Super Retail Group.
Administrators Michael Smith and Peter Hillig from Smith Hancock Chartered Accountants have been appointed, with the first creditors meeting scheduled for December 12.
Workout World had fitness equipment showrooms across Australia, and in late November this year it sold its brand name, intellectual property, inventory and store assets to retail giant Super Retail Group.
Super Retail Group announced at the time that Workout World would become part of the group’s sports retailing division.
It said the acquisition would provide the opportunity for the division to build on its fitness product business.
The price paid for the assets was not revealed, with the company stating that it was “not material” and therefore not likely to have an impact on earnings in the short term.
Super Retail Group has a strong stable of sports businesses including Rebel, Amart Sports, Ray’s Outdoors and Goldcross Cycles. It also operates Supercheap Auto.
Super Retail Group chief executive officer Peter Birtles told SmartCompany this morning that the retail giant saw the potential of the brand and was pleased to take it on at the value of its inventory.
“We are in the process of taking on the leases for 21 retail sites,” he says.
“The company owned 26 stores, but five were not profitable.”
He says there are a small number of franchises, but Super Retail Group has not taken on the franchise arm. However, he says the company is in discussions with franchisees about their next steps.
Employee liabilities have been taken on by Super Retail Group, with a number of staff staying on.
Birtles says the Workout World business focused “a bit too much on expansion” with its sights set on the US, and had to pull back on marketing. He understands it has some debts that need to be settled.
He says Super Retail Group has the right capital building capacities to take the Workout World brand to the next level.
Birtles says the Workout World acquisition enables the group to offer equipment that it can’t fit into its Rebel and Amart stores. He thinks the fitness industry is doing well, particularly people wanting equipment to help them get fit in the privacy of their homes.
Super Retail Group’s profits from sales were up 23% for the 2012-13 financial year.
The administrators for Workout World were contacted but were not available to talk prior to publication.
It is not the first fitness equipment business to collapse in recent times, with Fitness Choice collapsing in early November this year. The downfall contradicts the rise in 24-hour gym franchises, including Anytime Fitness and Jetts Fitness.