Bally Total Fitness Holding Corp. (BFT) on Wednesday said it put its Crunch Fitness (search) chain, high-end health clubs in cities such as New York and Los Angeles, up for sale as it tries to restructure and strengthen its finances.

Bally, which faces a criminal probe into accounting issues, said it would evaluate interest from potential buyers of Crunch before making a final decision on the best way to improve shareholder value. Bally has hired The Blackstone Group L.P. to assist in its turnaround strategy.

A sale of the Crunch chain would continue a wave of deals in the fitness market, following a recent agreement by private equity firm Forstmann Little & Co. (search) to buy 24-Hour Fitness Worldwide Inc. (search) for $1.6 billion.

Bally said Crunch has a total of 85,000 members in 21 gyms. 24-Hour Fitness, by comparison, has about 3 million members in 330 clubs in the United States, as well as 15 clubs in Asia.

Other fitness centers have been targeted for acquisition by private equity firms in the past year. The Sports Club Company Inc. (SCY) in February agreed to be bought out by Millennium Partners and other shareholders to become a private company.

The turnaround efforts at Bally come as its accounting practices face a criminal investigation by the U.S. Attorney for the District of Columbia.

Chicago-based Bally recently ousted its controller and treasurer on grounds of improper conduct following an independent accounting review by its audit committee.

The company has said that investigation also found its former chief executive and former chief financial officer were responsible for multiple accounting errors and "creating a culture of aggressive accounting."

Last month, Bally said it expected to report a loss for the fourth quarter and full-year 2004. Still, it said efforts to cut costs and boost membership were paying off.

It said the number of new members increased 20 percent in the fourth quarter and was up 22 percent for the full year.