The administrators who rescued Dave Whelan Sports (DW Sports), the gym and sports retail group, have appointed CAPA to audit more than 70 fitness centres across the business.
CAPA will be conducting a full property and accounts payable audit on sites where the gyms were located, after business recovery specialists at BDO managed to sell the business out of administration to Frasers Group – the company owned by sportswear tycoon Mike Ashley.
Founded by former Wigan Athletic owner Dave Whelan, DW Sports had operated 73 gym and 50 retail sites in the UK, though 25 of the stores closed prior to its administration.
The group’s financial problems took hold in March 2019, when it posted an operating loss of £17m due to various issues including onerous leases, restructuring costs and reduced footfall.
This led to a period of closing unprofitable stores but when lockdown restrictions started in March 2020, the business was struggling to survive with virtually no income and only a small element of cost relief by deferring VAT and furloughing staff.
After losses increased during this period Graham Newton and Ryan Grant, both partners at BDO Business Restructuring, were appointed joint administrators on 3 August 2020.
They have since sold the business out of administration to Frasers Group. The sale included all open leisure and retail sites and saved hundreds of jobs.
BDO has also now instructed CAPA, meaning CAPA’s audit team will use bespoke software to conduct a forensic analysis of all property costs across more than 70 sites where DW operated gyms.
The team will interrogate all data related to service charge management expenses, utility bills and rent to discover if any ‘overspend’ can be recovered, on a no-win no-fee basis, for the creditors of DW Sports.
CAPA will also inspect all invoice data through the entire business, to see where any further overpayments can be recouped.
