CLSA acquires Japan fitness club operator
CLSA Capital Partners (CLSA CP) has acquired Japanese 24-hour fitness club operator Worldplus for an undisclosed sum.
The private equity firm invested via its $400 million Sunrise Capital III fund, which targets companies with enterprise valuations of JPY5-15 billion ($47-141 million) and strong potential for expansion within Japan.
Worldplus operates 125 gyms domestically under the World brand, which is positioned as offering reasonably priced services. The plan is to streamline the organization structure, improve corporate governance, and work with existing franchise owners to expand the existing footprint.
“Despite the negative impact of the recent COVID-19 outbreak on the fitness industry, Sunrise III believes that exercise will become increasingly popular in the mid to long term as people seek to enhance their health and fitness,” CLSA CP said in a release. “The company is expected to contribute to the wellbeing of a wide range of age groups.”
Fitness centers have remained an attractive investment area across Asia regardless of differences in lockdown measures between markets. This has been supported in part by perceptions that COVID-19 has elevated public health consciousness and led to government-led initiatives promoting fitness. However, virtual services such as online exercise courses have proven difficult to monetize.
Franchise models are seen as benefiting from a recognizable brand name but characterized by tight budgets at each location, which can make it difficult to meet COVID-19 sanitation requirements such as ensuring reduced footfall or hiring additional staff to carry out disinfection processes. Franchise gyms are also regarded as the lower end of the market and therefore more likely to suffer during an economic downturn as casual customers reduce spending.
Recent activity in this space includes the acquisition of Anytime Fitness Asia by a consortium including Aura Group and Exacta Capital Partners, a Singapore-based private equity firm affiliated with Japan’s Mizuho Bank.
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