1. Review the chapter 2 closing case, "Fitness First and the UK health and fitness club industry" (pg. 73 in the hard copy version, your page in the e-version may be different).
2. Submit your responses to the questions below by Sunday of week 3 (5/24):
Closing Case
Fitness First and the UK health and fitness club industry
In July 2014, John Wartig, the chief financial officer of Fitness First Ltd, was preparing for a meeting with his CEO, Tony Cosslett, to review Fitness First’s capital expenditure plans for the next five years. Both were relative newcomers to the company: following the acquisition of Fitness First by private equity firms Oaktree Capital and Marathon, Cosslett was installed as CEO in June 2012; Wartig was appointed CFO six months later. Fitness First claimed to be the world’s largest privately owned health club group with 540 clubs and over one million members in 21 countries. In January 2014, Fitness First announced a £350 million five-year programme of capital investment which would include £50 million on upgrading and rebranding its UK clubs and £64 million on expanding its presence in Asia, including entry into China. John Wartig’s concerns related to Fitness First’s UK operations: given the intense competition within the UK health club sector, would Fitness First’s investment in upgrading its facilities and repositioning within the market yield a satisfactory return to its owners?