2023-12-3
Fitness Equipment Industry Weekly News – W49
1. PureGym Reports Robust Quarterly Results, Fuels Ambitious Expansion Plans
PureGym has recorded a strong third quarter, witnessing a 15.8% increase in revenues to £137.7m, driven by a rise in membership and higher average revenue. The nine-month figures show a 16.4% revenue growth, reaching £409.3m. Despite increased operating expenses due to expansion efforts, the company's overall losses for the nine months decreased to £42.6 million from £60.5 million the previous year.
PureGym holds the position of the largest private gym operator in the UK based on both the number of gyms and members. As of September 30, the company managed 362 gyms in the UK (compared to 317 in Q3 2022) and boasted a membership of 1,465,000 (up from 1,216,000 in Q3).
Furthermore, PureGym is a major player in Denmark with 167 gyms, the second-largest operator in Switzerland with 44 gyms, and has made a notable entry into the US market with its inaugural three clubs under the brand Pure Fitness. The company is actively pursuing franchising opportunities in Saudi Arabia and the UAE, establishing a presence with 19 sites in the Middle East.
Having raised £805 million in September, PureGym is strategically allocating funds for substantial expansion in key regions such as the UK, Switzerland, the Middle East, and other promising markets. According to Cobbold, this financial initiative provides the company with a competitive edge against rivals facing resource constraints, despite the notable increase in interest payments resulting from the fundraising.
2. Xponential Fitness Celebrates 3,000 Studios and Global Expansion
Xponential Fitness, the leading franchisor of boutique fitness brands worldwide, recently marked a significant milestone with the opening of its 3,000th studio – a CycleBar in Loveland, Colorado. With plans for continuous growth, the company is set to open 500 to 600 studios annually, aiming for a total of 6,000, including 1,200 international locations, within the next five years.
CEO Anthony Geisler said during an interview that while Xponential has expanded into Europe, including a recent launch in France, the company is cautious about its international approach. Geisler mentioned, "The UK has been softer for franchises since COVID, so we're evaluating its development. Across Europe, we've planted flags in Germany, Austria, Portugal, and Spain, observing performance before further expansion."
Currently operating in 23 countries, Xponential anticipates reaching nearly US$1.4 billion in total studio revenues this year. The company, already boasting ten successful brands, is on the verge of acquiring an eleventh. In addition, a strategic partnership with LA Fitness will introduce clubs-in-club studios, expanding market reach and creating opportunities for existing franchisees.
Geisler emphasized, "This approach helps our franchisees grow their territories. By integrating our brands within LA Fitness clubs, we can reach thousands more people and increase capacity for our members." Xponential's diverse portfolio includes popular brands like CycleBar, Club Pilates, StretchLab, RowHouse, Pure Barre, YogaSix, Rumble, AKT, Stride, and BFT.
3． World Gym Australia Expands Partnership with Fitness Mogul Leon McNiece for Sweeping Growth
World Gym Australia (WGA) is embarking on a significant expansion in Australia and New Zealand through a strategic partnership with seasoned fitness entrepreneur Leon McNiece. McNiece, known for founding Goodlife Health Clubs Australia and Snap Fitness Australia/New Zealand, and owning Total Fusion Health and Wellness clubs, has recently acquired a stake in the WGA master franchise.
This move positions WGA as the largest big box gym chain in the region, according to Jon Davie and Mike Nysten, World Gym Australia partners. The partnership comes at a time when WGA boasts a gross sales turnover exceeding $100 million from the previous financial year, with an annual growth projection of 25%.
As a unit of World Gym International, WGA currently has over 140,000 members across 40 clubs in Australia. With McNiece on board, the fitness club plans a rapid expansion, aiming to open ten clubs in the next 12 months in the QLD, NSW, WA, and NT regions. WGA is actively seeking multi-unit holders within its franchising group and welcomes new franchisees.
WGA has ambitious plans, including the introduction of a platinum club model and the acceleration of corporate clubs across Australia. The company is developing a syndication model to offer investors a more affordable entry point. McNiece, having previously collaborated with WGA CEO Roger Westerman, brings a wealth of experience, having played a key role in creating and establishing Goodlife Health Clubs as one of Australia's leading fitness brands.
4．SportScheck Files for Insolvency: Frasers Group Reconsiders Acquisition
German sporting goods retailer SportScheck, part of the Signa property group, has filed for insolvency in a Munich court, marking a significant development amid Europe's property crash fueled by rising interest rates and building costs.
Despite UK-based Frasers Group plc's previous binding agreement to acquire SportScheck, the parent company of Sports Direct is now withdrawing from the deal due to SportScheck GmbH's insolvency filing. Frasers expressed disappointment but sees SportScheck as an appealing asset in a vital European sports market. The company intends to collaborate with the preliminary insolvency administrator for SportScheck, exploring options to acquire the business/assets out of administration.
5．Authentic Brands Group Expands Reebok Lineup with Sakar International Partnership
Authentic Brands Group has inked a long-term licensing deal with Sakar International to develop and distribute Reebok-branded sports equipment and electronics. The range includes basketball, pickleball, baseball, soccer, and football gear, as well as audio, tech, and massage products.
Steve Robaire, EVP of Reebok at Authentic, expressed enthusiasm about the partnership, highlighting its role in expanding Reebok into new product categories. This collaboration aligns with Reebok's recent announcements involving Shaquille O’Neal, Allen Iverson, Justin Fields, and Angel Reese, marking the brand's resurgence in the sports equipment industry.
Jeff Saka, president of Sakar International, shared his excitement about the venture, emphasizing the common goal of delivering high-quality and innovative products. The new assortment is slated to debut in 2024 across key department stores, specialty retailers, and online platforms in the U.S. and Canada.
6. StretchLab Celebrates Rapid Expansion with 400th Franchise Opening
StretchLab, a pioneer in one-on-one assisted stretch services, has achieved a significant milestone with the opening of its 400th franchise location at StretchLab University Village in Colorado Springs, CO. This achievement comes just eight months after the company celebrated its 300th studio, exemplifying its remarkable pace of opening a location every three days in 2023.
With an impressive portfolio of over 900 signed franchise agreements, StretchLab continues to advance its global development with numerous studios in the pipeline.
Verdine Baker, President of StretchLab, highlighted the brand's transformative impact, stating, "Just five years ago, assisted stretching was not widely known, primarily reserved for professional athletes. StretchLab has been at the forefront of changing that perception, surpassing 400 locations and making assisted stretching accessible to communities worldwide in record time."
Terry Rackley, owner of StretchLab University Village, expressed pride in being the 400th studio and shared excitement about the brand's growth. "This is our seventh StretchLab studio, and I'm extremely proud of our team. I look forward to helping serve our community."
StretchLab's recent openings include studios in Huntsville, AL; Detroit, MI; Asheville, NC; Seattle, WA; and Washington DC. The brand continues its international expansion with studios in Australia, Canada, Mexico, Kuwait, Japan, and on 15 Princess Cruise ships.
Author:
The founder of FITQS/FQC
The columnist of magzine <China Fitness Equipment>
20 years in fitness/sporting equipment OEM/ODM technical, quality control and sourcing management.
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