CBE Interview

Income from (sport equipment distribution sales) helped finance our development in Russia

Irina Razumova talks about how Planet Fitness has survived and thrived during a troubled economy

By Patricia Amend

CBE: Please remind us how and why you got into the health club business.

IRINA RAZUMOVA: After living in Sweden for many years, in 1989, I started a joint Soviet-Swedish venture in fitness. In 1990, we opened the first club under the World Class trademark in Leningrad, now St Peters- burg. We opened three more clubs in Leningrad, and in 1993, the first in Moscow. I ran these clubs until 1997 when they were sold. It was a challenging time. The fitness industry was

new. We could not trade in any foreign currency, and the purchase of equipment or any other imported goods was allowed only through government-owned foreign trade organisations, which was a complicated process. As a result, I spent much of my time acquiring what we needed for our clubs.

CBE: How did Planet Fitness come about?

IR: In addition to club management, I had been engaged in sport equipment distribution. Income from these sales helped finance our development in Russia. One of our main partners was the British company

Forza Fitness, headed at that time by David Giampaolo. In 1996, David introduced me to Mark Mastrov and Leonard Schlemm at the IHRSA International Convention and Trade Show. We began to discuss opening a chain of affordable fitness clubs. We opened the first Planet Fitness facility in 1997.

CBE: The Russian economy suffered severe setbacks in 1998. How did you survive that?

IR: Yes, we were launching our first clubs at the height of the first serious recession in Russia. Most of our leases were denominated in US dollars, and all of our revenues were in rubles. By being very flexible, we were able to renegotiate many of our leases and make payroll—even as the ruble fell in value from six to the US dollar, to 28 to the dollar, in less than a month. Fortunately, the purchase of a membership was one

way people could spend their savings wisely. Even as the ruble continued to deflate in value, people were still assured visits to the club for the next 12 months.

Q&A Highlights

• A challenging start • Surviving setbacks • Consolidation ahead • Opportunities abound

CBE: What are your day-to-day responsibilities at Planet Fitness right now?

IR: I serve as the chairman of the Board of Directors. However, my number one priority is to develop new projects and new clubs. In addition, monitor employee training, and communicating with our team members. The result is a high level of service for our clients.

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