» Your Business
$$ BY RICK CARO A
pparently, the club indus- try has put thoughts of the recession behind them. Clubs of all types are seem- ingly pleased with recent
results and optimistic about the re- mainder of 2015. New builds are flour- ishing. The ease of entry has always been there, but more current club companies are adding to their portfo- lios as are a variety of newcomers. Few clubs are closing. The club industry is aligned with a series of positive trends.
2014 headlines Data from a variety of sources, in-
cluding IHRSA, highlights the key club metrics in an upward direction. The comparison of same-club reve- nues versus the previous year shows a
28 Fitness Business Canada May/June 2015
slightly improved direction. Non-dues revenue is also increasing, in contrast to a year ago. Net memberships overall improved over the previous year, with control over attrition rates playing a major role. There is still a challenge to the predictability to a specific month’s total versus the previous year. EBITDA (earnings before interest,
taxes, depreciation and amortization) margins continue to improve, espe- cially over the recession years of 2009- 2011. However, these margins have still not returned to the 2006-2007 lev- els. The total number of members in the overall club industry grew, as did the number of total commercial clubs. There have been several segments
showing continued facility accelera- tion, including the niche studio sec- tor, HV/LP (high-volume, low-priced)
Club Industry Financials: a Tone of Optimism
The following is a wrap-up of the Financial Panel presentation at the 2015 IHRSA Conference and Trade Show. Several executives from private equity firms and financial institutions that deal with the fitness business shared their thoughts on the financial events and trends that shaped the industry in the prior year.
clubs and 24-hour, 7-day a week, all- access clubs. The studio segments that showed substantial increases were barre classes, boot camps, HITT (high- intensity interval training facilities), yoga, Pilates, group cycling, boxing/ kick boxing and small-group training. Many of these utilized the franchise concept. Landlords have continued to be attracted to the health club indus- try with more-attractive real estate deals than previously. 2014 saw con- struction costs start to increase after a series of flat years.
Debt financing a major resource For the past two years, debt financ-
ing has been very available for fi- nancing and re-financing purposes. Financing for new-builds continues to be difficult for club developers with no previous track record. Cash-flow based lending has reached to new levels of multiples of EBITDA dollars. Leverage has led more private equity firms to enter the industry and pay higher val- ues for groups of clubs. Asset-based lending to existing club owners has been offered at very attractive interest rates and terms and with respectable
$
$
$
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48