Corona says the business faces the financial challenge of having to pay 2.5 times more than the US for fitness equipment “I
f I’m going to lose members to low-cost clubs, I’d rather lose them to my own low-cost clubs than to my competitors,” says Edgard Corona, explaining
how, in 2009, he launched low-cost SmartFit into the market alongside the premium operation, BioRitmo, that he’d established in Brazil in 1995. With this self-cannibalisation strategy
in mind, Corona’s philosophy is to offer the very best clubs in both the premium and the low-cost segments of the market, in a bid to ensure his facilities are people’s first and second choices. Whether they then opt for BioRitmo or SmartFit is up to them. But it’s been a learning curve, as
Corona freely admits. Rewind to 1995, BIORITMO
Established: First club opened 1995 Membership fee: US$100 a month Club size: Typically 1,600sq m Offering: Gym and group exercise Member profile: Diverse age range and fitness experience Number of clubs: 28 Locations: Brazil, predominantly in São Paolo
June 2015 © Cybertrek 2015
when he resigned from his job as a chemical engineer to invest in the first ever BioRitmo club. “We did everything wrong,” he says.
“The club lost money for seven or eight years until we made the space bigger and offered more parking.” But come 1997, and the opening of
the second BioRitmo in Paulista, the recipe had already changed. “I’d visited London and had been inspired by the design and the experience you got in the restaurants over there. “I decided I didn’t want my clubs to
feel like health clubs – I wanted them to feel like you were walking into one of those restaurants. Our Paulista club changed the whole market – it was very clean, with a great colour scheme and a strong focus on lighting.”
SMARTFIT
Established: First club opened 2009 Membership fee: US$20 a month Club size: 1,000–1,500sq m Offering: CV and resistance equipment Member profile: Younger, exercise-savvy members Number of clubs: 227 Locations: Brazil, Mexico and Chile
Read Health Club Management online at
healthclubmanagement.co.uk/digital 35
Confronting costs He continues: “But even then, it was hard for us to grow because of costs. Interest and inflation rates in Brazil were very high – we had to change our prices every month – and the import tax on goods coming into Brazil meant we were paying around two and a half times more for gym equipment than US operators. A treadmill would cost us US$25,000 – more expensive than a car
– so we didn’t have much kit in our clubs. “In fact, that premium on fitness
equipment is still the case – it remains one of our big challenges.” Corona realised more streamlining
was needed and, attending his first IHRSA event in 2001, he hired one of the expert presenters to refine his sales process. The facility mix was also
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