Equinox to buy L.A.-based Sports Club’s luxury fitness properties
Los Angeles-based Sports Club Co. has agreed to sell three Southern California properties and one in New York City to competitor Equinox.
A source familiar with the negotiations said the purchase price was about $125 million.
The luxury fitness companies said they signed the deal Wednesday. The properties include the real estate for the Los Angeles and Irvine locations and the leases for the Beverly Hills and the New York Rockefeller Center properties, said Harvey Spevak, chief executive of Equinox.
The deal is expected to close in the latter half of September, and New York-based Equinox said it plans to keep all of the newly acquired clubs open and give each a multimillion-dollar renovation.
“Our plans are still being developed,” Spevak said, but they include major renovations of locker rooms and other aspects of the facilities.
Equinox, which will own 56 properties after the acquisition, sees the deal as an opportunity to expand its offerings in Los Angeles, where its clubs are thriving. “We believe Los Angeles is a great growth market,” Spevak said.
The acquisition will not affect members of the clubs involved, he said. Sports Club/LA members will not have to reapply for membership, and there are no plans to increase fees.
Sports Club/LA locations in Boston, Miami, San Francisco, New York and Washington, which are owned by Millennium Partners Sports Club Management, will not be affected by the transaction and will retain their Sports Club/LA names.
Asked why Sports Club decided to part with the four properties, Nanette Pattee Francini, the company’s president and co-founder, said only that it was a tough decision.
“The past few years have been record-breaking for The Sports Club Co., so this decision was particularly difficult,” she said in a statement. “But we are confident that Equinox will guide the clubs into the future and ensure that they continue to be the enduring, some say iconic, institutions that they are.”
Sports Club shares, traded over the counter, more than doubled in price Thursday, closing at $0.34, up from $0.15.
Once the purchase is finalized, Sports Club will no longer own any health club properties but will continue to own other properties, said a spokesman. The company will continue to exist and will evaluate its options to increase shareholder value, Francini said.
