FITNESS NEWS Europe 1

Pure Gym firms up IPO plansA

nalysts are upbeat about the prospects for Pure Gym, the leading gym operator in the United

Kingdom in number of gyms and members, which intends to raise £190 million (£223.7m) through a float on the London stock exchange, probably in October.

Driven by its disruptive, low-cost and technology-enabled concept, the operator estab-lished by Peter Roberts in 2008 had 163 gyms at the end of June, with 785,770 members paying an average monthly fee of £19.79.

Pure Gym operates with much the same low-cost model as The Gym Group, which hit the stock market last Novem-ber, but analysts appear confi-dent that both of them may ex-pand profitably in the years to come – not unlike Ryanair and Easyjet in the airline business, or Premier Inn and Travelodge in the hotel industry.

“There’s a big opportunity for both of them to expand pro-

vided they can remain focused on providing a quality product at attractive prices,” said Wyn Ellis, leisure analyst at Numis.

Pure Gym reported sales of £125.2 million (€147.4m) and a gym site adjusted EBITDA of £41.0 million (€48.3m) in 2015, which saw the comple-tion of a corporate rebranding. With 27 gyms opened in the first half, including 16 con-versions of LA Fitness gyms

acquired in 2015, the group posted a sales increase of 51% to £76.6 million (€88.9m). The group’s adjusted EBITDA reached £16.5 million, up 23% compared with the same six months last year. It would have

soared by 44% without non-re-curring items related to the ac-quisition of LA Fitness.

There are few divergences between the business ap-proaches of The Gym Group and Pure Gym, suggesting that their valuations may not be far apart. On this basis, Pure Gym’s projected initial public offer-ing (IPO) could value the com-pany at more than £500 million (€580m).

Pure Gym may be at an ad-vantage due to its market leadership in the U.K. budget gym category, then again it may be argued that The Gym Group has more upside poten-tial with ancillary revenues, among other factors.

It was reported early this year that Pure Gym appointed Rothschild to study options for its ownership. Pure Gym was acquired in May 2013 by funds advised by CCMP Capital Advi-sors, a U.S. private equity fund, Hermes GPE and some of the gym operator’s managers.

L’Orange Bleue moves into Southern Europe

T he largest fitness fran-chise in France with over 300 clubs, L’Orange Bleue is preparing to move into

other south European coun-tries, starting in the next few months in Spain and Italy.

Jérôme Olivard, project man-ager at L’Orange Bleue, says that two clubs are to open in Barcelona between Decem-ber and January, one of them owned by the group on Aven-ida de Borbon and the other through a licensing agreement on Carrer Girona. The plan is to have nearly ten clubs up and running in Spain around the end of next year.

Another project has been confirmed in Italy, with the

opening of a club in Naples with an Italian partner – one of the people who currently cre-ate classes for the group. The opening is expected to take place in the first quarter, again

to be followed by more.“We’ve been working on

these projects for several years. Now we’re ready to roll out and have full-fledged develop-ment plans in place for these

new markets,” says Olivard, who steers projects in France up until their opening, and su-pervises the developments in Spain and Italy.

He adds that talks are under-way with potential franchisees in other markets but with-out sites secured or openings scheduled so far. They are in a “study phase” to work out con-sumption habits and business practices, among others.

Both the Spanish and Italian projects will replicate the con-cept used in France, with cardio and strength equipment as well as many classes that are all ex-clusively created for L’Orange Bleue.

TechnogymQ1 2016 (€ 000, %)

Q1 2016 Change

Sales 115,574 + 11.2%

Italy 10,875 +12.8%

Europe (excl. Italy)

62,022 +14.5%

North America 10,484 +19.9%

Asia Pacific 15,758 -5.6%

Latin America 5,852 +58.7%

MEIA (*) 10,583 -3.8%

FNE# 15 You’re reading Fitness News Europe, the independent business news publication for executives in the international fitness industry. With an online portal and a bi-monthly newsletter, Fitness News Europe provides reliable business news and often exclusive analysis on the fast-moving fitness market. Check out fitnessnewseurope.com for further information about the publication, to register for a free trial and obtain your subscription at a special launch rate.

CONTENTS Pure Gym firms up IPO plans..............................p1-5L’Orange Bleue heads for Spain .............................p1-4TRX builds up range ........p2Sports Direct CEO quits ...p2Octane founder leaving ...p3Prime buys Health City Italia .................................p6Prama ups its game ........p6FIBO targets trainers .......p7

Other news

1escape (p7), Brait (p7), CMG Sports Club (p7), Nike (p3)

Continued on page 4....

Sept. 27, 2016Issue N°15

Fitness News Europe is published by Zelus (France)

info@fitnessnewseurope.comEditor: Barbara Smit

news@fitnessnewseurope.com@ All rights reserved.

The information published in this newsletter cannot be copied or distributed electronically without the publisher’s written permission.

Photo: Pure Gym

Continued on page 5....

2 FITNESS NEWS Europe

Retail

Disclaimer: Content in this publication and on the related website is for your general information and use. It does not constitute the offering of investment advice (either actual or implied) and should not be relied upon in making (or not making) any decision. We use all reasonable endeavors to ensure the accuracy of the content but do not guarantee or warrant the accuracy, completeness or timeliness of any content whether from a third party or otherwise. Views expressed by third parties are their own.

The reshuffled European management team at TRX Training is prepar-ing to launch a range of

accessories that should enable fitness club owners to install a full-fledged “TRX zone” in their gyms, and support the TRX group’s push into retailing.

Gavin Whelan, who was appointed last month as se-nior sales director for TRX in Europe, the Middle East and Africa (EMEA), said that the demand became clear in the last months, after the company launched its own functional training course using TRX equipment.

“The only product we have been selling are suspension straps and the time has come to leverage the brand,” said Whe-lan. “We found that there is an appetite in the gyms to have a fully-equipped TRX zone.”

The range currently in pro-duction includes a medicine ball, a slam ball, kettlebells, conditioning rope, training mats, soft plyo boxes, strength bands and a foam roller. They should become available to be delivered to gyms around Eu-rope in November.

The accessories are intended for clubs and the group’s online sales for the time being, but

they should later enable TRX to expand its retail sales and thus take advantage of the increased brand recognition.

“We want to get our functional training space in the commer-cial fitness clubs, but once we have strongly established that we could take the accessories to the retail market,” said Whelan, adding that a special retail range could be launched in Europe in the second half of next year.

TRX Training would be lean-ing on Whelan’s track record in retail sales, as the director of international sales for Trig-ger Point. “Gavin did this very successfully at Trigger Point and Implus and given TRX’s rising brand awareness from consumers we see retail as a big opportunity for forward growth,” said Ryan Damon, vice president of global sales at TRX

Training. The retail offering currently focuses on TRX Fit, a travel-friendly, portable sus-pension system, and the TRX Strong.

TRX products gained prom-inence among U.S. retail con-sumers through a partnership with Dick’s Sporting Goods, the leading sports retailer in the American market, which has expanded a trial to a much broader partnership.

Whelan said that the Euro-pean trials scheduled for the next months include 50 stores affiliated with Intersport in the U.K. and another 20 belonging to Elverys in Ireland. A trial has already started at about 50 Intersport stores in Greece, Turkey, Romania and Bulgaria (which belong to the same In-tersport partner in Greece).

Another move that should enhance brand recognition for TRX among retail consumers is its latest agreement with Under Armour to make a co-branded range of apparel and footwear. It will provide added exposure to TRX in Under Ar-mour accounts, and anybody who purchases an item from the range is to receive a free TRX digital workout.

The range was launched at the 2016 Trainer Summer

held by TRX in Baltimore ear-lier this month. Randy Hetrick, the company’s founder, was on hand to announce the partner-ship at the Under Armour Per-formance Center, along with Doug Reed, Under Armour’s general manager and senior vice president in charge of the training category.

TRX previously sold apparel using Under Armour technol-ogy, but the licensing deal for a co-branded range reinforces the partnership. It remains un-clear when the TRX products will become available in vari-ous European countries.

Damon says that TRX is pro-jecting sales growth around EMEA for next year, but the strongest performance are likely to come from the U.K., Germany, France, the United Arab Emirates, India, Switzer-land and Scandinavia.

Sales are to be handled by a reshuffled team. Cyril Auvillain, who was heading up sales in most of Europe, is leaving at the end of October. His relocation to Croatia was unfavorable for travel. Jakub Wurzel, who was supervising sales in Eastern Eu-rope, is to support sales to Euro-pean key accounts. Two junior sales people will be assisting with the sales push.

TRX claims space in European gyms and stores

Mike Ashley has taken over as chief executive at Sports Direct Inter-national (SDI), the British sports retail giant and budget gym oper-

ator, after the sudden resignation of Dave Forsey.

Forsey started working with Ashley as a store assistant more than three decades ago. “I feel like I have lost my right arm, but I hope to have the opportunity to work with Dave again in the future,” said Ashley in a statement last week.

The founder of SDI, which ran 733 stores around Europe at the end of its fiscal year on April 24, owns about 55% of the group’s shares and he is widely regarded as the person who drives the company, yet until last week he was deputy executive chairman of SDI’s supervisory board.

SDI is the owner of USA Pro and Everlast, among other brands. It operates about 30 gyms in the U.K. and a few weeks ago it

unveiled plans to launch Everlast-branded fitness clubs, as reported in FNE#11. Two of them are already open in Southport and King’s Lynn.

Sports Direct has been under intense pressure due to its weak performance and an inquiry by a parliamentary committee into working practices, along with con-cerns among investors about governance issues. In an unusual rebuff, the majority of independent shareholders voted against the re-election of Keith Hellawell as SDI’s chairman at the group’s shareholders’ meeting (AGM) earlier this month.

Forsey was held responsible for some of the issues in a report about working condi-tions at SDI put together by its legal adviser, Reynolds Porter Chamberlain (RPC). He al-ready agreed to give up a share bonus that would have been worth about £3.6 million. However, there was no particular sign of his pending resignation at the AGM.

The change led to a jump in the compa-ny’s share price, which has been battered over the last year. It didn’t help that, in July, SDI reported a decline of 8.4% in its underlying pre-tax income to £275.2 mil-lion for its latest fiscal year.

SDI announced several significant re-forms and concessions before and after the AGM. The group said that staff on con-troversial zero-hour contracts would be offered work contracts with guarantees of at least twelve hours per week. SDI also said that it would get an employee repre-sentative elected on the board and order a review of governance. It added after the AGM that this report would be supervised by an independent party, not RPC.

SDI further announced that Karen By-ers, head of retail, has become global head of operations, while Sean Nevitt, head of buying, has been elevated to global head of commercial activities.

Sports Direct chief executive quits

Photo: TRX Training

FITNESS NEWS Europe 3

Top Gear

Less than one year after the takeover of Octane Fitness by Nautilus Inc., Dennis Lee is preparing

to leave the zero-impact fitness equipment specialist he estab-lished fifteen years ago and ran as chief executive until a few months ago.

A former employee at Life Fitness, Lee founded Octane Fitness together with Tim Porth in 2001 and built it into a distinctive equipment brand with a strongly established in-ternational network. The two already sold a majority stake in the company in early 2005 to North Castle Partners, a private equity firm specialised in the health, fitness and sustainable consumption sectors. Last De-cember Octane was acquired for $115 million by Nautilus Inc., the company behind the Bowflex, Nautilus, Schwinn and Universal brands.

“I still believe it is the right group for Octane. The lead-ership at Nautilus shares the same kind of culture and values that we share here at Octane, “ said Lee. “What transpired as we got into our strategic direc-tion and how we were going to structure the company, was that it wasn’t a great fit for me personally.”

As the two companies went ahead with some integration, Lee became vice president and general manager in charge of commercial and specialty at the Nautilus group. This job is to be taken over at the end of the year by Ryan Simat, who started at Octane Fitness in 2003 and became vice pres-ident of sales. Simat is to pro-vide leadership for the global sales and service teams, and

the day-to-day operations of the Octane commercial and specialty businesses.

The news of Lee’s departure came as a surprise at Octane, where the founder is strongly appreciated for his leadership and his loyalty, to staff as well as customers.

It remains uncertain what Lee’s next move will be after his departure. He acknowl-edges that he has been able to monetise his efforts at Octane, but he appears to be yearning for the drive that characterised the start-up years at Octane.

As Lee recalls, his view about exercise entirely changed when the first elliptical came into the market. He described it as a light-bulb moment, because he was then in his early thirties and suf-fering from issues with his knees, which made the reduction of im-pact all the more relevant.

“One of the biggest highlights is that we’ve created products that allow anybody to have a great workout,” said Lee. “To me that’s a huge deal.”

The team built up at Octane is another item of particular pride for Lee, along with the group’s innovative drive. “We just did it different,” he said. “When we started in the base-ment, we had a vision and a

strategy, that we were going to focus in two ways that other people weren’t.”

One of them was to remain entirely focused on zero-im-pact training, “and that’s re-ally helped us to dig deeper on the innovation side,” Lee said. The other was to refrain from any vertical integration, which again helped to make sure that product innovation remained the priority.

The international develop-ment of Octane Fitness, which made about 23% of its $65 mil-lion sales outside of North Amer-ica in 2015, was strongly aided by former Life Fitness manag-ers. “We had a commitment to become a global company early,” said Lee. The European head of-fice was set up in Rotterdam in 2005 by Leo Schreuders, who remains its managing director, and Herman Rutgers.

Lee further pointed to the arrival of Mark Lowder from another industry two years later, to supervise Octane’s ex-pansion in Europe and further afield. Another push came from the partnership with North Castle Partners, which Lee de-scribed as a “big help.”

The Octane founder is up-beat about the prospects of the brand under the owner-ship of Nautilus. He underlines the complementary strengths in retail channels, with Oc-tane’s focus on specialty and commercial accounts, and the Nautilus group more intensely working the mass merchants and consumer direct channels. “The fit is great for the long term,” says Lee.

Porth remains in charge of marketing and product devel-opment at Octane Fitness.

Octane co-founder leaving Nike gainsweaken

Tim Porth and Dennis Lee, Octane Fitness founders (Nautilus Inc.)

Nike has reiterated its target to reach sales worth $50 billion by the fiscal year 2020, as

the company is coming under growing attack from rivals in the U.S. but upbeat about the impact of investments.

The group reported today that its sales moved up by 8% to $9.1 billion for the three months until the end of Au-gust, which is the first quarter of its fiscal year. However, the group’s earnings before inter-est and tax shrank by 11% to $1,288 million due to a sharp rise in marketing spend for the Rio Olympics, paired with in-vestments for the longer term.

The target of $50 billion was reaffirmed by Mark Parker, Nike chairman and chief executive, earlier this month at the group’s shareholders meeting, after some investors raised questions about Nike’s current dynamics. They have been moaning about the decline in Nike’s share price so far this year.

The concerns mostly relate to the U.S. market, where Nike has been under pressure from avid demand for Adidas and Under Armour. Nike’s North American sales were stagnant in the previous quarter, after an impressive growth run.

Parker was eager to explain at the meeting and when an-nouncing the quarterly perfor-mance that the company was making long-term investments to become faster and more personal – by reducing lead times and making consumer connections that enable it to more sharply personalise its offer.

Sales for the first quarter of the group’s fiscal year were up by 6% in North America. Nike was more buoyant in Western Europe, where its turnover moved up by 10% without cur-rency exchange rate changes, while it surged by 21% in Greater China.

Then again, future orders for the Nike brand moved up at a relatively slow clip of 5% at the end of the quarter.

The news of Lee’s depar-ture came just a few days before the Find What Fits event in New

York, where the Nautilus group brought prototypes of two standout products this week.

The Bowflex HVT was de-signed for Hybrid Velocity Training, which Nautilus de-scribes as a new approach to fitness combining cardio and strength training for a fast and effective workout.

The other is the Modern Movement M-Pad, a smart bal-ance board that uses 3D mo-tions to improve balance and agility while strengthening leg and core muscles. It integrates with mobile phones and the M-Trac app, which tracks in-stability and movements, and measures balance ability.

Top Octane products such as the Zero Runner and Lateral X elliptical were on display at the New York event as well. Bowflex HVT (Nautilus Inc.)

4 FITNESS NEWS Europe

Gyms

Barcelona targeted by foreign franchisesL’Orange Bleue was launched

in Rennes in 1996 by Thierry Marquer, a former fitness coach, who remains its owner. Licensed clubs started opening ten years later and the group currently has 22 of them.

The French clubs charge a monthly fee at an average of €25 to €30 per month for a yearly subscription, but the Spanish and Italian clubs are both ex-pected to adopt a slightly lower monthly fee, in the range of €20 to €25 per month.

While the prices are acces-sible, the company points out that the concept sets itself apart from several other low-cost gyms through the empha-sis on live group classes. L’Or-ange Bleue has its own “Yako” label for classes, which are taught exclusively at its clubs and franchises, and four train-ing centers for coaches.

L’Orange Bleue currently boasts 323 operational clubs with just over 300,000 mem-bers in France and its expan-sion plans call for 70 to 80 fran-chise openings per year. The group is easily on track this year, with about twenty open-ings scheduled before the end of the year. On top of that, the group intends to add another 40 own clubs in the next four years.

The competition in Barce-lona comprises several local players, such as DiR, which

has been become established mostly through large-scale gyms in the Catalan city, but has launched three smaller franchising concepts earlier this year for Barcelona and other cities.

The fragmented Spanish fitness market has already drawn quite a few foreign players in the last years, such as Basic-Fit and McFit. Ba-sic-Fit has earmarked Spain as one of the growth areas to be targeted on the back of its stock market launch in June, although it has been focusing on Madrid so far.

Barcelona targetL’Orange Bleue’s move into Spain, which was reported earlier this month by Palco 23, comes after several other French players who appear to have picked Barcelona as a springboard to jump into the Spanish market. The latest entrants include Simply Gym, which runs six budget gyms in southwestern France and opened one club in Barcelona.

Another French franchise concept, Vita Liberté, moved into Spain in 2014. The plans suffered a setback due to a split from its French partner in the country. He switched to another concept, When U Want (WUW) Fitness, which is based in Barcelona and has several own clubs and franchises.

Vita Liberté still wants to du-plicate the network of 97 clubs and franchises it has built up in France. It currently has three clubs in Spain and ambitions to expand to about 100 in the next five years. Elodie Poupon, previously construction man-ager, has become development manager for Spain and moved to Girona, where a Spanish of-fice is to open shortly.

At the same time, L’Orange Bleue has to deal with competi-tion from at least two U.S. fran-chise operators. In Spain for several years, Anytime Fitness said in June that it had 21 clubs and another 20 territories sold, which were in pre-opening de-velopment.

Albert Marco, master fran-chisee for Snap Fitness in

Spain, opened his own club on about 500 square meters near Sants railway station in Barce-lona in September, and he told Fitness News Europe earlier this year that he was target-ing about 100 Spanish clubs in five years’ time (this appears to have turned into the magic number for franchise develop-ment plans in the larger Euro-pean fitness markets).

Marco added that the focus may be on mid-sized Spanish cities, due to the much stron-ger competition in the larger cities. The manager has been in the Spanish fitness industry for more than two decades, working for Fitness First and Anytime Fitness as well as Pre-cor and several Catalan sports organisations.

L’Orange Bleue’s move into southern European markets comes as the French group is facing more intense compe-tition in its own market, with investments by several other franchise chains and the ar-rival of budget gyms.

French competitionBasic-Fit is rapidly gaining ground in northern France but it has started deploying its cluster strategy in some parts of western and southern France as well, with Toulouse among the latest projects. L’Orange Bleue managers have heard that Basic-Fit is prepar-ing to open two clubs in and near Rennes, one of them liter-ally down the road from L’Or-ange Bleue’s head office.

Yet Olivard says the arrival of the well-oiled Dutch-based group could actually benefit the French fitness industry. “It will structure the market and make the fitness product more dynamic,” said Olivard. “It

should also help to raise inter-est from financial partners in the fitness industry,” he added.

Not unlike Basic-Fit in the Netherlands, L’Orange Bleue’s scope in France is enabling it to invest in nationwide TV advertising, with clips of a few seconds before programs sponsored by the franchising group.

Mon Coach SantéThe French franchisees pay a contribution for such ad-vertising amounting to 2% of their turnover, on top of a flat fee of €550 per month. L’Or-ange Bleue provides thorough follow-up, with an evaluation held with specialists every six weeks, running through a long list of checks and updates.

Separately, the group has be-gun to expand a secondary con-cept, L’Orange Bleue Mon Coach Santé. With monthly member-ship of about €50, this concept distinguishes itself from L’Or-ange Bleue Mon Coach Fitness by targeting people who have to practise fitness activities for medical reasons, for example due to rehabilitation or chronic ailments that prevent them from using standard equipment or training courses.

Nicolas Gaugain, develop-ment manager at L’Orange Bleue, says there are currently seven of these clubs in France and another twenty in the mak-ing. His forecast is that these franchises will open in the first quarter of 2017 and that the concept will end the year with more than 40 clubs.

“This concept is entirely new for the French market. It uses specific equipment and strong support from qualified trainers as well as nutrition specialists and physiotherapists,” says Gaugain.

The gyms are fitted with thirty pieces of equipment from Dr Wolff. Members get four per-sonal meetings with special-ists when they get started, and again every ten weeks.

L’Orange Bleue already moved into Belgium with a master franchisee and it had four clubs there last year but the number has been halved.

Photo: L’Orange Bleue

...continued from page 1

Quick Readn L’Orange Bleue, French fitness franchise with over 320 clubs and 300,000 members, moving into Spain and Italyn Other French franchises are exploring the market, starting in Catalonian Fragmented Spanish market drawing more foreign playersn L’Orange Bleue also targeting 70 to 80 openings per year in France, and 40 own club openings in four yearsn Developmet of secondary, health-oriented franchise concept, Orange Bleue Mon Coach Santé

FITNESS NEWS Europe 5

Gyms

The next year it attempted a tie-up with The Gym Group, which was thwarted by the competition authorities. In May 2015 the company bought the LA Fitness Group and its 43 gyms – retaining 31 of them.

Humphrey Cobbold, the group’s chief executive, told FNE that the company’s shares could be listed on the main board of the London stock exchange in October, assuming it decides to go ahead with the IPO. The price range is expected to be set around the end of the September, leading to the start of the road show.

Pure Gym said that the proceeds and loans under new banking facilities would be used to repay existing bank debt in full, to reduce net leverage and support profit-able expansion. Apart from gym openings, this could involve new formats and acqui-sitions.

The operator estimates the potential for low-cost gyms in the U.K. at about 950 value gyms and 3.5 million to 4.5 million members, compared with 1.9 million members at 450 gyms in March 2016.

Pure Gym intends to open about 38 gyms this year, including about 20 new gyms and 18 conversions of former LA Fit-ness clubs. The plan for next year includes about 25 to 30 openings (excluding po-tential conversions) and 20 to 25 per year over the medium term. It may also launch more fitness concepts such as Pure Ride, a cycling studio that was opened in London in January.

Irish marketThe company added that the Irish mar-ket is “likely to be well suited to the Pure Gym customer proposition and operating model” and that “a number of other in-ternational markets” could provide extra opportunities for the group in the longer

term, “either through the acquisition of existing gym portfolios or through organic roll-out.” However, Cobbold emphasised that Pure Gym is “very focused on maxi-mising the potential in the U.K.,” and that there aren’t any concrete plans for entry into any other markets as yet.

The primary offering would consist of newly-issued shares but the company

added that the IPO may include a partial sale of shares held by current sharehold-ers, which include members of the man-agement, other individual shareholders and funds advised by CCMP and Hermes (through an entity called Gym Bidco). The company and selling shareholders expect to target a free float of at least 25% imme-diately upon admission, the group added, with an over-allotment option of up to 15%.

“Pure Gym’s growth from a start-up company in 2008 to undisputed market leader today is a story of disruption and shows how entrepreneurial vision can build real business success,” stated Tony Ball, chairman of Pure Gym.

The rise of Pure Gym and other bud-get operators has transformed the Brit-ish market in the last years. As the group pointed out, an estimated 88% of the 1.9 million people who became gym members in the five years until March 2016 joined value gyms. The numbers are based on market analysis by the Leisure Database Company (LDC), as reported in FNE#7.

Disruptive modelHowever, the group has also attracted members from rival gyms with its rela-tively cheap and flexible concept, which does not require annual commitment, and offers near-permanent opening hours. The company says that 45% of Pure Gym members who joined in the six months until the end of June were formerly mem-bers of clubs run by other U.K. operators. The average price of less than £20 at Pure Gym compares with an average monthly membership fee of £41.13 in private sec-tor gyms in the country, again based on LDC research.

Among the most important aspects of its business model, Pure Gym points to low personnel costs, owing to the use of technology. That allows it to employ only two to three full-time staff per gym, while services such as cleaning, maintenance and remote security monitoring are out-sourced to specialists. Furthermore, Pure Gym operates without high-cost ameni-ties such as swimming pools.

The group thus prides itself on juicy re-turns. On average, gyms open as Pure Gym for at least two years had 5,631 members in 2015. They generated sales of £1.1 mil-lion, a gym site adjusted EBITDA margin of 46% and gym site return on capital em-ployed (ROCE) reaching 47%.

Among its moves to raise extra sales and profits, the group is expanding gyms where feasible and trying out new mem-bership options. Pure Gym is also devel-oping new sales channels and cross mar-keting. Cobbold added that the proceeds from the intended IPO would help Pure Gym to continue investing in technology.

The IPO plans come after the launch of The Gym Group as well as Basic-Fit’s float on the Euronext exchange in Amsterdam in June.

Pure Gym watches Ireland and other markets

Photo: Pure Gym

Pure Gym, 2015 (units at period end, £ m)

2015 2014

Gyms 152 84

Mature Gyms (*) 60 38

Members 670,000 412,000

Revenue 125.2m 68.6m

Gym Adjusted EBITDA

41.0m 25.1m

Group Adjusted EBITDA

28.0m 19.2m

Pure Gym, H1 2016 (units at period end, £ m)

2016 2015

Gyms 163 131

Members 786,000 617,000

Revenue 76.6m 50.8m

Gym Adjusted EBITDA

23.5m 18.5m

Group Adjusted EBITDA

16.5m 13.4m

(*) Gyms open as Pure Gym for at least two years Source: Pure Gym

Quick Readn Pure Gym plans to raise £190 million through a float on the London stock exchange.n Valuation could reach more than £500 million based on The Gym Group’s stock market launch last year.n Pure Gym sales soared by 51% to £76.6 million for the first half of this year, with 163 gyms and 785,770 members at the end of June.n Plans call for 20 to 25 openings per year in the mid term, potentially other fitness concepts and acquisitions.n lreland prime target for international expansion, but current focus on U.K. potential.n Proceeds and new loans to repay debt in full and to support expansion, over-allotment option of up to 15%.

...continued from page 1

6 FITNESS NEWS Europe

Gyms

Pavigym has started offering its up-graded interactive flooring installa-tions in Europe, to make the Prama concept all the more efficient and

playful.Probably the first installation in Europe

will be a high-end club in Waterloo, near Brussels. It has taken up the latest gener-ation of Prama’s fitness gaming concept, with software that allows users to com-pete against each other at the gym and in other connected gyms.

“We have regrouped the various inter-active modules on a single platform and made it much more advanced and effi-cient,” explains Cyrille Simon, sales man-ager for France and the French-speaking parts of Belgium, Switzerland and north-ern Africa at Pavigym, the Spanish com-pany behind Prama.

Launched three years ago, the Prama concept is marketed as fun and effec-tive equipment for personal and small group training, using interactive floor-ing and walls with integrated LED lights and sensors, several types of functional markings and lighting. It ticks quite a few of the boxes for the latest recom-mendations to support retention, not least gamification.

Prama installations signed up now will come with the latest software, meaning that the system should be up and running in the next months, and it should become increasingly active as more gyms and users join up. Pavigym says that previous installations may get a software upgrade.

The new generation Prama includes a self-service function allowing users to log in and record their workout. It also attrib-utes points to the user, which could serve for the gym operator as a basis for a loy-alty or price reduction scheme.

It was shown as a prototype earlier this year at IHRSA and at FIBO, complete with

the interactive lighting function. The only function that hasn’t been fully integrated yet is facial recognition, which should be finalised next year.

Prama already has some customers in Europe, either gyms or corporate clients, and it garnered plenty of international exposure with a large-scale installation at Asphalt Green in New York earlier this year.

“The customers are premium fitness centers that want to differentiate their of-fer from other clubs,” said Juan Canovas, who supervises sales in Spain and rela-tionships with distributors in several Eu-ropean countries.

He says that the payback has been quick for early adopters such as Injoy in Ger-many. The clubs may charge an extra small group training fee for the use of the instal-lations, others include it as a permanent option in one of their membership offers. The more durable benefits may also come in the shape of extra members and im-proved retention.

The European installations are usually on about 60 square meters, sometimes converted squash courts. The costs vary strongly, depending on the number of modules as well as the preparations that are required for the installation.

The Spanish company adjusted its team with the appointment of Andreas Woisch as global sales director in August 2015. He was previously head of customer ex-perience at Les Mills in German-speaking countries, after assignments at Precor and Milon Industries. He supervises a network comprising entities in the U.S., the U.K., France, Germany and Norway, to cover the Scandinavian market.

Colin Averis was appointed in April as sales director for the U.K. and Ireland, tak-ing over from Alan Cuthbert. Averis was previously senior area sales manager for Matrix Fitness in the U.K., after another stint as sales manager at Keiser U.K.

Established in Alicante as a supplier of shoe soles and mats, Pavigym started branching out into gym flooring about twenty years ago. Prama has been adopted by fitness clubs and some corporate cus-tomers, and most recently by team sports clubs for high-performance training.

Prime purchases Health City Italia

Prama upgrade hits European fitness clubs

Prime boasts that it has become the largest Italian chain of fitness clubs after the acquisition of twelve Health City gyms, expanding its

network from three to fifteen gyms and about 41,000 active members.

Launched seven years ago, the buyer is a group of three full-service fitness and wellbeing clubs in Bologna, with about 10,000 members. The purchase of the Health City gyms, at an undisclosed price, adds fitness clubs in several other cities around Italy, including Rome, Milan, Turin, Padova and Vicenza.

The buyer explained in a statement that Francesco Iezzoni, the general manager of Prime, intended to split the offering into two types of clubs: Premium clubs with all-inclusive services and “Easy” clubs with a more flexible approach.

It added that the clubs would stick with the main concept of Prime, including the use of technology and professional

staff. Among the group’s partners are Technogym, Gant and New Balance.

Health City is the concept that was developed for several years from the Netherlands by René Moos and Eric Wilborts. Health City ran up to 170 gyms in seven European countries after its

acquisition of former Fitness First clubs in the Netherlands, Belgium and Luxembourg, and later in France, Spain and Italy.

However, since Moos decided to focus on the development of Basic-Fit, the budget gym operator, some of these former Fitness First clubs have been turned into Basic-Fit and others have been divested.

The six remaining Health City clubs in France were sold earlier this year to Ekkio Capital, a French investment firm that already moved into the fitness market last year. The French clubs generated estimated sales of €12 million with more than 13,500 members.

The French and Italian sales leave Health City with fourteen clubs in Germany and ten in the Netherlands. The German clubs at least are widely thought to be on the auction block.

The Health City clubs in Italy are already divided between all-inclusive clubs in Milan and Rome, and Basic clubs in other cities, with prices starting at €19.90 per month.

FITNESS NEWS Europe 7

n 1escape health club in Dublin boasts that it broke the world record for the largest exercise ball class in the world with 433 participants at Smithfield market, near the fitness club in the Irish capital. The event was organised by the gym as part of the activities around National Fitness Day, which was held in Ireland on September 16. Nearly ten years old, 1escape belongs to Iconic Health Clubs, a group of three upmarket gyms that further includes Icon in central Dublin and the Dartry Health Club. The event was meant to inspire more people in Ireland to get active. It was hosted by Alan Quinlan, a retired Irish rugby union player, and an official from Guinness World Records was on hand to count and verify the fitness re-cord as it was broadcast live on Facebook. 1escape says that the largest exercise ball class prior to its record was held with 391 people at the Queen Elizabeth Olympic Park in August.

n Brait, the South Africa-based investment firm that acquired a majority in Virgin Act-ive’s shares last year, said that it intended to move its registered office from Malta to the United Kingdom, and would seek to switch its primary listing from Luxembourg to the London stock exchange. This would help to raise its profile in the U.K. and provide access to a wider range of international investors. “The board believes that the Com-pany is at a size and stage of development where it has become increasingly important that it can offer its existing investors the benefits of a listing on a major international developed market,” it said in a statement. Brait explained that the U.K. is the country where it is most strongly invested. Assets include the New Look fashion chain and the Iceland supermarket chain. In conjunction with the proposed transfer and the potential listing, Brait would consider raising capital, and it would retain a secondary listing in Johannesburg.

n CMG Sports Club, the leading fitness club operator in Paris with 23 service-oriented gyms, has updated its brand identity in a large-scale advertising campaign. Unlike the more price-driven campaigns prevalent at this time of the year, CMG says that its ads are meant to convey an image of contem-porary fitness appealing to Millennials, and to spread the idea that fitness is not just sport but a way of life. “+ Que du Sport” is the pay-off of the campaign prepared with Blackrainbow, a young advertising agency, using black and white photography and words such as energy, audacity and sharing. The former Club Med Gym is deploying the campaign on about 1,800 billboards at metro stations and on buses, in several waves. As reported in June, LFPI Group, a French-based asset management firm, has taken over majority stakes in CMG Sports Club in France and Silhouette Fitness in Switzerland, with a plan to support the development of the two entities.

Gyms

FIBO’s organisers are entirely reconfiguring the space and program dedicated to group

fitness classes and launching a European convention at the fair’s next edition in April, to draw more gym operators and instructors from around Europe.

“The main reason for our ‘group fitness offensive’ is that we consider well qualified trainers as a very important issue for the future of the fitness industry,” says Ralph Scholz, FIBO’s event director. “With well-trained personnel studios can distance themselves clearly from competitors.”

FIBO 2017 has been scheduled to take place in Cologne over four days from April 6 and is expected to draw about 1,000 exhibitors and more than 150,000 visitors. The number of visitors jumped by 12% to 153,000 this year. They included some 83,000 trade visitors, among them 11,500 trainers and instructors.

The changes involve an “aggressive restructuring” of Hall 4.1, which is meant to turn into the forum for the latest workouts from all over Europe. Along with several stages and many demonstrations, it will feature a separate business

area where exhibitors and trade visitors may sit down for quiet talks. This part of the fair will also draw new exhibitors from the virtual fitness segment.

On the Thursday and Friday, the hall will be addressing the requirements of gym

operators, personal trainers and instructors. At the weekend, the same hall will be open to private visitors, allowing them to learn about new workouts and to get actively involved.

FIBO’s first European Convention is to be arranged separately in Hall 5.1 with the Federation of International Sports Aerobics & Fitness (FISAF), supported by Europe Active and the European Register of Exercise Professionals (EREPS). This should give a

more international flavour to the event, where a convention was previously organised by the Deutscher Fitness & Aerobic Verband (DFAV), a German association.

FIBO boasts that exhibitors at the fair will be able to show their programs to members of these associations as well as the International Fitness Academy (IFAA) and decision-makers from the largest European fitness chains.

FIBO said the convention would thus reach an “unprecedented European network” and bring together trainers from across Europe, including the industry’s top instructors. “The goal is to create the largest professional education and training programme for trainers in Europe,” the organisers added.

As part of this endeavour, FIBO is offering cheap accommodation to about 1,000 trainers and instructors. They will get a spot at the FIBO Convention Camp, including a place to sleep in a tent near the exhibition center as well as chill-out zones, barbecue and other catering that should reinforce the community character of the event. The tickets are priced from €121

for a three-night stay and €169 for the convention (including trade fair admission).

A major aspect of the restructuring is that group fitness demonstrations will be centralised in Hall 4.1, while they were previously spread between several halls. Next year some of the exhibitors may still have group activities at their booth, but all categories will be on display in the special group fitness hall.

It will feature two centrally located group fitness stages, one of them for classic courses and the other showcasing equipment-based workouts. The program includes trendy activities such as CrossFit and calisthenics, along with innovative group fitness classes. An aqua fitness area is also in the cards.

The group fitness area was previously situated in Hall 5.1, which some visitors didn’t find easily. Hall 4.1 was previously an Active hall intended for private visitors at the weekend.

The European Health and Fitness Forum (EHFF) organised by Europe Active and FIBO will be held for the fourth time on the day before the fair’s opening, on April 5, focusing on “Consumer Engagement.”

FIBO targets trainers with European Convention

Gym Briefs

Photo: FIBO