As if going to the gym wasn’t enough of a pain in the leg, most of the big established chains succeed in making it even worse by tying you in to lengthy contracts that cost upwards of £60 per month. So it’s little wonder than at a time when discount supermarkets like Aldi and discount airlines like EasyJet are flourishing, the fitness industry has been undergoing a similar revolution of its own.
The Gym Group, which offers flexible no-contract membership from £10.99 per month, is one of this trend’s biggest proponents and beneficiaries. Founded in 2008 by former squash ace John Treharne, the company now has 66 gyms and a turnover of more than £45m. Today it launched on the London Stock Exchange valued at £250m.
Currently owned by private equity firms Phoenix Equity Partners and Bridges Ventures as well as senior management, the company floated at 195p per share (up to 205p at time of writing), aiming to raise £90m from the sale of 65 million shares. It plans to open a total of 15-20 gyms this year and to use the cash raised do so every year from now on 'for the medium term'.
‘Today marks a significant milestone in the development of The Gym and we are delighted at the strong levels of investor interest and support for our IPO,’ Treharne said. ‘We operate a successful, innovative and technology-led disruptive business model, driven by an experienced management team and highly motivated colleagues. We believe that these factors give us a significant competitive advantage and we look forward to using our listing to realise our growth strategy.’
Things are looking not-too-shabby for the no-frills operator, but it’s in a fiercely competitive market. It attempted to merge with competitor Pure Gym last year, but the tie-up was scuppered by the competition authorities. And, of course, there’s always the risk that its existing customers grow tired of no-frills and begin to look upmarket, in search of swimming pools, fancy decor and bespoke fitness plans. Nonetheless, going from nothing to a £250m valuation in seven years is more marathon than walk in the park.