I would like to see the government change its mind about the VAT increase – it’s 2.5 per cent off the top line
In terms of your development pipeline, what are your plans for new clubs? We will open around 20 new clubs next year and will probably open in the region of 30–35 clubs in 2012. Openings will be weighted towards Asia and Australia – perhaps half of the new clubs. But equally we have openings planned in Germany, Belgium and the UK.
In addition to new openings, are you continuing to invest in existing clubs? Yes. You have to continually take the old clubs with you. We invest on a reciprocal basis, whether it be refurbishing shower blocks, painting clubs or replacing equipment. We’ve always stuck to our guns in relation to trading up cardio equipment every four to five years, and strength equipment every seven to eight years, and generally moving with the trends.
How do you determine where to target investment in existing clubs? There’s no hard and fast rule. We have clubs that are 15 years old and some that are five or six years old. People understand the difference between an old club and a tired club – we can’t stop clubs getting old, but we can stop them getting tired. In the UK this year, for example, we’ve replaced 50 shower blocks as part of a proactive programme to work our way through the estate, making sure all shower blocks that are over 10 years old are updated. There’s also a total club refresh programme when a club needs to be totally remodelled.
– the introduction of spa facilities, for example? We won’t be introducing spa facilities. Our main direction relates to the creation of freestyle training zones, whether that be TRX zones or ViPR workout areas. The space allocation of our clubs is gradually changing – it’s about making sure we have enough of that freestyle space, as well as providing the usual traditional equipment.
november/december 2010 © cybertrek 2010 Does Fitness First have any plans to diversify
How will Fitness First respond to budget gyms? In our existing clubs, we have plenty of experience of operating against budget operators – in Germany, for example, where McFit is a very large operator (see also p54). You have to make sure the feel of your club and your service proposition are distinguished from the budget clubs. You have to offer something that’s different and something that people perceive to be value for money. It keeps you on your toes. Any new competitor coming in is a threat, and particularly
one that’s redefi ning the market from a price perspective. But I feel that we have the breadth, the experience and the reach to ride out that threat. One other thing I would say about the budget clubs, which we’ve seen in other markets, is that they grow the market substantially. For a lot of people, price is a barrier to entering the sector, so therefore budget clubs actually increase the number of people participating, rather than ‘stealing’ from the same pool of customers.
Does Fitness First still aim to float? Will the annual results impact on these plans? We intend to float the company – probably in Asia – but the exact timing is yet to be confirmed. In terms of the results, the revenue growth and EBITDA growth is pretty good as far as we’re concerned. The business is probably of a size and scale that’s best suited in a public company capital structure, and that’s the objective of the flotation.
Finally, if you could have one wish granted by the government, what would it be? I would want them to change their minds on increasing VAT to 20 per cent in January. That’s effectively 2.5 per cent off the top line – either that or we pass it onto the customers and ask them to pay more. We’re looking at how we deal with that very carefully.
healthclub@leisuremedia.com pete hayman
Read Health Club Management online at
healthclubmanagement.co.uk/digital 71
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 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84