24 Hour Fitness Sells 19 Midwest Clubs to Genesis Health Clubs

Update: This story has been updated to include details about a subsequent sale of the St. Louis, Missouri, and Oklahoma City 24 Hour Fitness locations and an additional purchase of Gold’s Gym locations. 

24 Hour Fitness, San Ramon, California, has sold its 19 clubs in Kansas, Missouri, Nebraska and Oklahoma to Genesis Health Clubs, Wichita, Kansas, for an undisclosed amount. The changeover will be effective on June 15, according to Frank Napolitano, president of 24 Hour Fitness.

Rodney Steven, owner of Genesis Health Clubs, told Club Industry that after the transaction closed with 24 Hour, he sold the four 24 Hour Fitness clubs in St. Louis, Missouri, and the two locations in Oklahoma City to Gold’s Gym International for a sum he could not disclose. Steven also shared that he purchased six clubs from Gold’s Gym on Tuesday: two in Lincoln, Nebraska,

Napolitano told Club Industry that when private equity firm AEA Investors bought 24 Hour Fitness in 2014 and CEO Mark Smith and Napolitano came on board, the intention was to rationalize the company’s portfolio, meaning they planned to concentrate on areas with significant density to support a cluster of the company’s clubs.

“And our gyms are quite large, so a cluster of them requires a pretty significant population,” he said. “And if a city doesn’t have a significant population, our model doesn’t work particularly well in that city. We took a look at this particular part of the country, and those cities are simply smaller than our threshold, so that’s why when we were approached by Genesis about acquiring them, we listened and ultimately came to a deal.”

A memo sent by 24 Hour Fitness to staff noted that Genesis intends to hire as many 24 Hour Fitness team members as possible. A Genesis representative was to communicate employment opportunities on Tuesday, including details about application processes, employment offers and scheduling for June 15 and beyond.

Staff at the 24 Hour Fitness clubs that are being sold were informed of the sale on Tuesday.