1700 jobs at risk at sports retailer | Metro Bank agrees to buy rival lender | Insurance giant Hiscox swings to loss

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Sports retailer and gym group DW Sports has said it is to tumble into administration, with 1,700 employees at risk. The company was expected to appoint insolvency specialists after its income was wiped out by the protracted closure of stores and gyms during lockdown. DW Sports, which was founded by […]

Sports retailer and gym group DW Sports has said it is to tumble into administration, with 1,700 employees at risk.

The company was expected to appoint insolvency specialists after its income was wiped out by the protracted closure of stores and gyms during lockdown.

DW Sports, which was founded by former Wigan Athletic owner Dave Whelan, operated 73 gyms and 75 retail sites across the UK but announced plans to shut 25 of its stores last month.

The company said it will now wind down its retail business for good, with its website ceasing trading with immediate effect and closing-down sales starting at its 50 remaining stores.

READ MORE: Glasgow firm has helped keep lights on amid coronavirus lockdown

It plans to protect as many jobs and gyms as possible through the restructuring process.

DW Sports stressed that Fitness First, which is a sister company of DW, will continue to operate as a separate company and its 43 clubs will be unaffected by the administration.

The administrators intend to support employees, customers and gym members as far as possible while they look to secure a buyer or buyers for some or all of the DW Sports portfolio.

At present, 59 of its gyms have reopened in England and Northern Ireland, with a further 14 sites in England, Scotland and Wales unable to open due to Government restrictions.

Chief executive Martin Long said: “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.

“Like many other retail businesses, the consequences of this extremely challenging operating market have created inevitable profitability issues for DW Sports.

“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.

“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.

“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.”

Metro Bank has agreed to buy lender RateSetter in a deal worth up to £12 million.

Shares in the high street challenger bank jumped after it announced the deal to buy one of the country’s largest and oldest peer-to-peer lenders.

READ MORE: Fintech pioneer has faith firm can weather the storm

Metro Bank said it will pay an initial £2.5 million up front, with a further £9.5 million payable over the next three years, depending on performance criteria.

RateSetter was founded in 2010 and has seen more than 750,000 people invest or borrow through the platform, it said.

However, the lender slumped to a £8 million pre-tax loss in the year to March 2019 after reporting £33 million in revenue.

Shares were 6.4% higher at 109.9p.

Insurance giant Hiscox swung to a pre-tax loss in the first half of 2020 as it warned investors it increased its predicted costs from Covid-19 by more than 50%.

Shares in the company dipped after it said it expects 232 million dollars (£178 million) will be needed to deal with virus-related claims.

READ MORE: Marsh trio join Blackford push into Aberdeen

Hiscox said it has already paid out on a variety of policies, such as event cancellations and abandonment.

It reported a pre-tax loss of 138.9 million dollars (£106.6 million) in the six months to June, compared with a 168 million dollar (£129 million) profit in the same period last year.

Shares moved 5% lower to 742.8p.

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