03 August 2020 14:41

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The sports and gym company DW Sports has gone into administration, putting 1,700 jobs at risk. The group, which was founded by the former Wigan Athletic owner Dave Whelan, operates 73 gyms and 75 retail stores across the UK. The company, which said its e-commerce website would cease trading immediately, announced plans to shut 25 of its stores last month as the coronavirus lockdown wiped out its income. DW Sports said the remaining 50 retail outlets would continue to trade and would start closing-down sales from Monday. We fixate on the decline of the high street, but the real issue is Amazon | John Harris Read more "As a consequence of Covid-19, we found ourselves in a position where we were mandated by government to close down both our retail store portfolio and our gym chain in its entirety for a protracted period, leaving us with a high fixed-cost base and zero income," said the DW Sports group chief executive, Martin Long.

DW Sports goes into administration, putting 1,700 jobs at risk

"Like many other retail businesses, the consequences of this extremely challenging operating market have created inevitable profitability issues for DW Sports." The company said that Fitness First, which it also owns and has 43 clubs across the UK, is a separate company and is unaffected. DW Sports said it intended to support employees, customers and gym members "as far as possible while efforts are made to secure a purchaser for some or all of the DW Sports portfolio". "Having exhausted all other available options for the business, we firmly believe that this process can be a platform to restructure the business and preserve many of our gyms for our members, and also protect the maximum number of jobs possible for our team members," Long said. The company said it was "inevitable" that some gyms would close. So far 59 have reopened in England and Northern Ireland. Fourteen sites in England, Scotland and Wales are unable to reopen because of government restrictions. "The decision to appoint administrators has not been taken lightly but will give us the best chance to protect viable parts of the business, return them to profitability and secure as many jobs as possible," Long said. "It is a difficult model for any business to manage through without long-term damage, and with the limited support which we have been able to gain." Although lockdown measures that kept all but essential stores on UK high streets closed for months have eased, retailers are struggling to recover because the virus has accelerated the move to online shopping. People are also proving reluctant to resume their old lives, with the number of those visiting high streets and shopping centres down sharply on a year ago. The absence of tourists is also hitting retailers hard. Last week, Selfridges moved to cut 450 jobs across its department stores, which followed 700 job losses at Harrods. Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk John Lewis recently announced plans to close eight of its 50 stores, including full department stores in Birmingham and Watford, while Debenhams has put itself up for sale to avoid going into liquidation. Retailers from Philip Green's Arcadia group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – to SSP, the company behind hundreds of railway and airport eateries under brands including Upper Crust and Caffè Ritazza – have made thousands of job cuts as the pandemic and the wind-down of the government's furlough scheme bite. However, some retailers have fared better than dire forecasts put out as the virus took hold in March and early April. Last week Next moved to upgrade its annual profit guidance to an expected £195m this year and said that even in a worst-case scenario, where the high street was hit by a second lockdown, it would still manage a £15m profit. The retailer, which made £600m in profits last year and is investing heavily in online shopping capability, had said in April it could post losses of up to £150m this year.