Spa Lady Corp., the Oakton, Va.-based company that rode the '80s fitness boom to open a chain of women-only health clubs, has agreed to a major corporate reshuffling and an option to hand over control of the firm in exchange for a $1 million line of credit from venture capital firm Allied Capital Corp.

The two-part deal, which effectively transfers control of the company to Allied, calls for Spa Lady founder and principal shareholder Howard Newson to resign as president and chief executive officer.

Patricia Swygert, a McLean business consultant, has been named president and CEO of Spa Lady.

Spa Lady also will issue warrants to Allied for 2.5 million shares of unissued stock, giving Allied a 60 percent share in the company, according to filings with the Securities and Exchange Commission.

The action comes as Allied, which has $113 million in assets, attempts to recoup $1.25 million it has invested in Spa Lady through its ownership of 388,000 shares and $2.7 million it has lent the company since 1983, according to an Allied executive and SEC documents.

Spa Lady, which has lost money since it went public in 1988, operates 27 health clubs in the Washington and Baltimore areas. Under its most recent strategy to cut operating costs, the company has sold franchise rights for another six clubs. It is moving away from operating clubs toward franchise agreements.

"We think Spa Lady is a very strong company in many respects, and the current plan to franchise, which has been in being for six months or so, just hasn't been completely implemented," said Allied President David Gladstone. "Once it's implemented, the company will be as strong as ever."

Under the agreement with Allied, reached at a July 6 board meeting, Spa Lady's two other inside board members resigned, to be replaced by Swygert and two Allied executives. Newson, who remains chairman, also agreed to be a consultant to Allied for three years and to seek Allied approval before he transfers any of his Spa Lady shares.

Newson was traveling on business and could not be reached immediately for comment.

Spa Lady, which failed to file financial reports for 1989, was delisted from the Nasdaq market system more than a year ago.

Analysts described the move as a "hardball" effort by Allied to restore stability to Spa Lady, which lost $1.9 million in 1989 and has sold off dozens of clubs as far away as Connecticut.

"Allied has an extremely good track record with these kinds of businesses, and part of the reason is they don't often get into Spa Lady situations and they know what to do when they do," said Peter Lewis Jennings, an analyst with the investment firm Legg Mason in Washington.