Mike Arnold
Long only, small-cap, tech, growth at reasonable price

Town Sports Gets Clubbed Again

Not much has changed in the last quarter for Town Sports International (NASDAQ:CLUB), except that shares are cheaper and the sale of its Manhattan real estate assets for $82 million has been delayed until July 2014 (and the non-refundable deposit was increased to $10 million).

(click to enlarge)

CLUB data by YCharts

The bear thesis for CLUB remains centered on an erosion in its competitive moat by low cost entrants and boutiques. While those risks do remain salient and illustrated by a loss of 1,000 members in the quarter, CLUB is well-capitalized and entrenched in many of its key urban markets, including Boston, New York, Philadelphia and Washington DC.

Where CLUB's competitive position becomes more precarious, though, is...

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