Just when it appeared all was lost, the landlord stepped in. Steve Tancock reports.
The Green Health Club, located in a village near Ashford in Kent, had once been a successful, thriving business with over 800 members. However, when its directors approached our Maidstone team earlier this year, they described the situation as "desperate" and believed that they were no longer able to trade.
In poor health
The club had suffered a big fall in membership numbers and had failed to negotiate a lower passing rent with its landlord. The directors felt they had no alternative other than to go into administration, appointing Smith & Williamson as administrators.
Shocked staff and members were informed of the situation and the club was temporarily closed. Some employees had not been paid for a while and were already considering alternative employment. The local competition, aware of the situation, had begun to offer special deals to lure members away. In short, the club was on the verge of total collapse.
The landlord steps in
Initially, the landlord had been adamant in refusing to negotiate the terms of the lease and stated that all arrears would have to be paid before he would consent to any arrangement. We carried out further reviews and investigations into the business but, given that an arrangement with the landlord looked unlikely, we concluded that we would have to close the business rapidly.
However, at a meeting with the landlord, where we presented him with the stark alternatives, we were able to negotiate a surprising, but satisfactory, conclusion: He made an offer to purchase the business himself!
Back in shape
In order to make sure staff and members stayed with the club, it was vital to keep lines of communication open. We worked with the landlord, ensuring that the local media publicised the situation and kept everyone up to date on developments.
Within 36 hours, the sale was completed and the club reopened its doors in time for a busy weekend.
It will be interesting to see what steps other landlords will be prepared to take as they are faced with increasing voids along the high street.
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