The IHRSA Global 25 The Altor Fund III signed an agreement to acquire ELIXIA Holding II AS, which operates 34 clubs in
Norway, 11 in Finland, and two in Sweden.
AUSTRALIA LEADS IN ASIA-PACIFIC Once regarded as a relatively untapped market, this part of the world now claims a number of successful club companies, including Konami and Central Sports in Japan; Ozone Fitness and Shenzhen Catic Well- ness in China; and Fitness First, which is based in the U.K. Now, in a major move, the Fitness First Group has applied for an initial public offering (IPO) on the
Singapore exchange during the third quarter of this year. The company, which is owned by BC Partners, based in London, hopes to raise S$600 million ($481.4 million) to S$700 million ($561.6 million). Fitness First now owns or franchises nearly 500 clubs across 18 countries in Europe and the Asia-Pacific region. “At the same time, over the past two years, club growth was slow or flat in markets affected by the
downturn,” observes Melissa Rodriguez, IHRSA’s research manager. “Thailand, in particular, endured a political crisis and violence that led to the loss of the True Fitness Zen Central club in Bangkok. Other countries, such as Indonesia, were relatively unaffected by the recession, which put Celebrity Fitness in a position to acquire California Fitness’ Malaysian operations. Just as they have in the U.S., some club companies in Asia-Pacific are now consolidating and improving their internal processes. “On the plus side,” continues Rodriguez, “more than 2.5 million people belonged to 2,800 clubs in the
Australian market, which generated $2 billion in 2010. Women-only clubs, such as Curves, Contours Express, and Fernwood Women’s Health Clubs, a full-service chain, have also flourished. At the moment, Fitness First Australia claims an estimated one-third of the full-service market.” In Japan, the fitness market, with some 3,500 clubs, generated an estimated $5.1 billion in 2010. After
three years of slight declines or slow growth, the first quarter of 2010 was marked by an uptrend, according to Club Business Japan. However, the devastating 8.9-magnitude earthquake that struck in March and the 23-foot tsunami that battered the coast have hurt the industry, Rodriguez says. “The FIA Japan has indi- cated that more than 100 clubs sustained damage, and 30 of them haven’t announced plans to reopen.”
W 40 Club Business Internat ional |
hat’s ahead for the industry in the near future? What trends bode well for clubs? Will deal-making resume in the U.S.? “We can all agree that 2010 was a challenging year as businesses were still recovering and valuations weren’t appealing with respect to exits,” says Knudsen. “However, with hold periods approaching five years for private-equity-backed fitness properties and business performance recovering, we believe that we’ll see a
fair amount of deal activity in 2011 and 2012.” “I see a number of trends continuing to drive the industry,” concludes Stullich. “From the consumer’s point of view, I see more choices emerging as operators become more sophisticated about identifying and exploiting niches. With respect to consolida- tion, I do see significant investor interest and improving capital markets. There’s also the ongoing entrepreneurial spirit, the passion for health and fitness, and the favorable demographic trends—which is why I love this resilient industry.”
– Patricia Amend,
PAmend@aol.com
Editor’s note: Data for this article was compiled, in part, fromThe 2011 IHRSA Global Report: The State of the Health Club Industry, which contains profiles of more than 240 companies. This comprehensive publication can now be purchased by logging on to
www.ihrsa.org/store; the price is $29.95 for IHRSA members, and $69.95 for nonmembers.
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JULY 2011 |
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