OPERATOR PERSPECTIVE
OPERATOR PERSPECTIVE
We also have a bit of time to get these clubs performing, as since the RP last year, we have temporary rent reductions on some sites, giving us a short-term lift. And then expansion… We have 27 Fitness First clubs now, of which 18 are in central London, plus two non-Fitness First branded, hotel-based clubs that bring the estate to 29. We’d like to open five new locations over the next year, with a target of reaching 50 clubs within five years. [Information correct at time of interview, 9 April 2024.] Growth will include a few more clubs in central London – predominantly through M&A to secure good sites – as well as filling geographical gaps to give us better coverage across the UK. Sites will be carefully selected, with manageable rents and locations that add greater value than the sum of the parts; we already have offers in on a few.
We have a brand that still carries weight with the consumer and we want to leverage this. We want to get back to being a major player with strong covenants for landlords. But crucially, we want to grow off the back of a unique, comprehensive value proposition – one that gives something back to members, justifies recent price rises and meets the needs of a new generation. Tell us more… Much has changed in terms of our member profile: London always skewed younger, but the dominance of Millennials and Gen Z today is striking. We’ve already begun disrupting our product to meet their needs, including a greater focus on strength training and gym floor classes. But these are the generations that really prioritise health and wellbeing in their lifestyles, so they also come more often, want to get in earlier, and seek the convenience of a one-stop health and wellness destination. It’s why we’re now considering a number of new products and services, from padel courts to lifestyle apps, cryotherapy and infrared to IV vitamin drips and collagen supplements. Why we’re exploring options for hyper- personalisation based on a far greater understanding of why each member is with us. And why we’re looking at new ways to make our app a daily go-to, including sleep tracking, nutritional advice, wealth management and high street rewards. We want to disrupt data and intelligence to really understand and serve the member, and in turn reduce churn. We want to be more than a gym. We want to be a lifestyle choice.
We’re in good shape. Once we get back to our pre-lockdown member count,
JUSTIN MUSGROVE
ours will be a strong, financially sustainable business.
Fitness First UK remains in recovery due to its central London locations, but it is growing its estate and disrupting for a new generation, says its new CEO
What’s the news from Fitness First? The headline is: new people, new strategy, new desire for expansion. Alongside myself as the new CEO, we have new directors of operations and marketing. They bring with them great customer centricity, an area in which the whole sector can improve, as well as experience in ecommerce, food and nutrition – something Fitness First would certainly like to get into. Our new strategy spans six pillars: mastery of the basics; pioneers of retention; leaders in fitness technology and data; employer of choice within the sector; new levels of customer experience; and financial sustainability. The final point, financial sustainability, will no doubt be of particular interest to readers of this State of the UK Fitness Industry Report.
With 65 per cent of Fitness First UK clubs located in central London, we’re still in recovery; revenues remain short of pre-COVID levels, currently at 90+ per cent. However, we’re profitable across all our clubs, agile, growing and optimistic, with our KPIs tracking well: sales, leavers, NMM (net member movement), yield, average length of membership, usage and EBITDA. We also have a team that’s genuinely committed to delivering results and a community experience for members, to an extent I’ve only previously seen in the US$30k-a-year super-premium operation I ran in Saudi. That’s pretty special and a strong USP for Fitness First. So, we’re in good shape. Once we get back to our pre- lockdown member count, ours will be a strong, financially sustainable business – and as London begins to wake up, offices fill and people once again see the value of gym membership, we can capitalise.
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STATE OF THE UK FITNESS INDUSTRY REPORT 2024
STATE OF THE UK FITNESS INDUSTRY REPORT 2024
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