16 entrepreneurs The muscle power behind gym success
Just five years ago, former England squash player and accountant John Treharne launched The Gym, the UK’s first budget gym operator, opening a site in Hounslow: since then, he has rolled out 32 gyms across the country and plans to have up to 50 open by the end of 2013. In the past year alone, sales have grown by a phenomenal 140%, making it one of the fastest-growing companies in the UK and earning it 13th place on the recent Sunday Times Fast Track 100. Treharne talked to Eleanor Harris about revolutionising the gym environment, his dream to put a gym on every tube stop in London – and ultimately to expand across the globe
John Treharne is founder and CEO of The Gym Group, registered in Hounslow. Born in West Sussex in 1954, he studied economics at University College London, and, while there, played squash for England. He later became British racquetball champion for three years, gaining a place in the Guinness Book of Records for the racquetball playing record. Treharne originally trained and worked as an accountant: he got into the leisure industry when he joined the Coral Leisure Group, and ran its commercial squash division. In 1991, he set up his first venture, Dragons Health Clubs, building the chain to 22 sites, before floating the company and selling it for £31 million to Crown Sports, where he assumed the role of managing director. He founded The Gym Group in 2007, with funding from Bridges Ventures, which has committed £17.5m to date. The Gym Group achieved sales of £13.5m last year, and employs 98 people. It won Budget Gym of the Year at the National Fitness Awards 2011, and has just achieved 15th place on The Sunday Times 100 Best Small Companies to Work For list. Treharne is a fellow of the Institute of Directors, was chair of Squash England for eight years, is on the board of ukactive, the fitness industry’s trade association, and has been shortlisted for CEO of the Year in the South East BVCA Awards. He is married with three daughters and lives in East Grinstead.
really understand what made it work. And that’s really what The Gym Group has come out of: it is based on their success but we are pioneering it in the UK and have taken the whole concept a lot further, mainly in the area of technology – the business is web-based, all our membership and administration is dealt with online – and we also expanded it into being a facility open 24/7, which wasn’t commonplace.
How did you build the business?
You went from being an accountant and playing squash for England to setting up your own businesses in the health and fitness industry – did that feel like a big leap?
Yes, it certainly does when you charge your house to your first venture, which is what I did in 1990 when I started Dragons Health Clubs. There is a significant risk if it doesn’t work, but I was very confident it would work. Clearly there was an opportunity to take squash clubs and to add other facilities to make them significantly more appealing, turning them into family-based racquets and health clubs.
Why did you set up The Gym Group?
Again, I’d seen an opportunity. I’d come across the low-cost sector, particularly in Germany and America – such as McFit in Germany and Planet Fitness in the US – which was incredibly successful, and I realised nobody did the low-cost offering in the UK, which is the most expensive health club market in the world. I did a lot of research on the American and German markets first, to
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Clearly there was an opportunity to roll the concept out. I approached the venture capital community who I knew well from the Dragons days. Funding startups in the UK is incredibly difficult, particularly at the moment, and by and large most of the venture capital community were very interested in the concept but wanted to buy an existing UK chain and convert it, but the whole point of the low-cost concept is that it is completely different. But I was then introduced to Bridges Ventures, which is a social private equity fund that does back startup businesses. They helped put together our first site in Hounslow, which opened in 2008, and they’ve been fantastic supporters of the business since then, providing us with equity capital, along with the banking facilities we have with HSBC, to enable us to roll out 32 gyms to date with 50 planned by the end of the year. We’ve opened 16 gyms in the past 12 months, six are in fit-out now, and we’re planning to open a further 15 - 20 gyms a year. We grew sales by 140% last year, and that growth is more aggressive this year than it was last year.
You’re expanding rapidly in a generally flat market – how would you account for your success?
It’s a number of factors. We have a great concept, for which there is a very strong demand: we’ve
THE BUSINESS MAGAZINE – THAMES VALLEY – APRIL 2013
had 7.5 million visitors to our gyms in the past 12 months, and we have a membership database of over 600,000 people. The core of the concept is that 70% of people who join health clubs only use the gym, so we give members what the majority want: lots of excellent gym equipment, in a very clean and airy environment, with no frills, so we don’t have saunas, steam rooms, bars or swimming pools. And because all our processes are web- driven, we’re then able to dramatically reduce cost-base – we don’t need any administration staff. So that’s what enables us to offer members low-cost membership. There’s no membership contract, no compulsion to membership, which I’ve always disagreed with. 35% of our members have never been in a gym before, we’re attracting whole new markets, and that’s as much about no contract as it is about price. Nearly 30% of our members
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