Dubai's Landmark Group buys Fitness First in MENA

Landmark Investments bought the franchise rights to the fitness chain from Saudi Arabia's Alhokair Group.

Landmark Group, the Dubai-based retail conglomerate with brands including Splash and Babyshop, has bought the regional Fitness First franchise. Landmark Investments, the group's investment arm, bought the MENA region franchise rights to the fitness chain from Saudi Arabia's Alhokair Group. Anuraag Malhotra, the strategic investment adviser of the Landmark Group, said: "We believe that this is a business which has potential because people are looking more and more towards becoming health-conscious and this satisfies their lifestyle needs. This has good potential to expand in the region."

Mr Malhotra would not comment on the price of the 100 per cent buyout, which was finalised yesterday, from the franchisee Awwal Fitness, a unit of the Alhokair Group based in the Jebel Ali Free Zone. The regional franchise of Fitness First, the largest privately owned health club in the world, has 16 outlets in Bahrain, Qatar, Jordan, Saudi Arabia and the UAE. Landmark Group will be absorbing these outlets and more than 1,000 employees, Mr Malhotra said.

Landmark Group bought the rights to Fitness First in 21 countries in the Middle East and plans to expand its reach, he said. But it was too early in the process to disclose any concrete plans. The purchase comes about one month after Landmark Group made an offer to take over the UK restaurant chain Carluccio's for a reported £90.3 million (Dh524.7m), with plans to launch the brand in India and expand its presence across the Middle East.

Landmark Group started as primarily a fashion retail company, creating clothing brands such as Splash and Babyshop, before opening food concepts such as Gourmet Station takeaway and Mango Tree. It now has more than 940 outlets across the Middle East. While the UAE's retail sales slowed in response to the economic downturn, declining by as much as 40 per cent, Landmark's collection of mid-market brands benefitted from consumers' new budget-consciousness. Its sales and profits during the 2009-2010 fiscal year ending on June 30 rose 25 per cent from the previous year, to US$3.2 billion (Dh11.75bn), the group said.

Yesterday's acquisition is the latest example of the group's aggressive growth strategy. It ventured into the hospitality industry this year, with the opening of its first CityMax hotel in Dubai. Landmark announced this year that it was planning a $150 million expansion across the region, starting with 150 new stores this year alone. Landmark Investments would not make any further acquisitions before the end of the year but would resume its push next year, Mr Malhotra said.

"We are in the market to look for investments. If there is any compelling proposition, we would be happy to explore it further," he said. "We want to invest only in retail and hospitality. That is our investment strategy."