THE Jackie Skelly chain of fitness clubs has been granted High Court protection after a judge was told it had run into financial difficulties but still has a good prospect of survival.
The directors of Map Dance Ltd, trading as Jackie Skelly Fitness, successfully applied to the court for an interim examiner to be appointed to the company which operates 10 clubs, five in Dublin and the other five in Meath, Wicklow and Kildare.
The court heard an unnamed party was willing to invest significant equity in the company which would ensure its survival.
Bernard Dunleavy, for the directors, said if any of the clubs had to be closed as part of the examinership process, membership fees will be returned. Court protection was also required because an examiner would be able to reassure the chain's 299 employees during the examinership period, counsel said.
The court heard the company had made a small profit up to November last year but there had been a fall-off in membership of 15pc since then and no significant new memberships in January, the main period for people wanting to join fitness clubs. An independent accountant has projected another 15pc fall off in the coming year. The company had a turnover of €19.8m in 2008 but this had dropped to €14.4m last year.
It now has a debt of €12m mainly to Ulster Bank which, along with significant shareholder investment, was the main source of the funds used to expand the chain from one fitness centre to 10 since 2002.
Its current problems were also caused by the fact that it was renting premises which were mostly subject to upward only rent reviews.
Negotiations had taken place with some of the landlords but one has issued a summons threatening to liquidate the company over rent, while two other landlords had also written saying they may do the same.
Mr Justice Frank Clarke said on the evidence before him he was satisfied there was a realistic opportunity for the company to address its problems under examinership. He appointed Kieran Wallace of KPMG as interim examiner and he made the matter returnable to the High Court later this month.
In a statement last night, a spokeswoman for Jackie Kelly Fitness said it would continue to service its members as normal.