INTERVIEW TOTA L T R ANSFORMAT ION
Kate Cracknell speaks to the team respons ible for the turnaround and future growth of the Total Fitness health club chain :
CEO Richard Millman, turnaround exper t Warwick Ley, and pr ivate equity inves tor Ray Stenton
Ri chard Millma n CEO, Tot al Fi tne s s
“T Richard Millman
If we don’t have the best people
delivering the best experiences, we may as well not bother
otal Fitness was in a bad way by the end of 2012,” says Richard Millman, CEO of the health club
chain since early 2013, very matter-of- factly. “It had been owned since 2010 by Barclays Bank and the Co-op Bank – a debt for equity swap – and the two banks had done a lot of the heavy lifting, including closing Total Fitness’ three clubs in Ireland and a further four sites in the UK to leave a core of 16 clubs. But the business was still in bad shape financially. “At that point, Barclays invited
turnaround specialist RooGreen Ventures to come on board, which it did in December 2012. RooGreen is essentially two guys – Warwick Ley and Brian Davidson – who I already knew, and they asked me to help with the due diligence. We then presented a business turnaround plan to the banks, and I offi cially came on board as Total Fitness CEO in February 2013. “We then got stuck into the
turnaround. Brian continued to work with the landlords, sorting the leaseholds – in fact, the landlords ended up investing £8.5m themselves towards the refurbishment of 14 of our 16 clubs. Warwick continued to look at the cash position of the business, and I worked on the operational side of things. “Nine months later Brian stepped back,
and in May 2013 we appointed Andy Mellor as FD, which meant Warwick could step into the role of chair.”
30 Read Health Club Management online at
healthclubmanagement.co.uk/digital
Refurbishing the estate He continues: “The business used to bump along at the top of its overdraft limit on a continual basis, so we worked closely with suppliers to improve our cashflow. We also realised there was a lot of cash going out on non-key projects, so we reined those in and focused on growing the top line of the business: the 87 per cent of revenue that comes from membership subscriptions. “We discussed putting prices up, but in
the end decided against it; the members had been through a load of pain over recent years and wouldn’t have responded well to a rise. Instead we focused on growing the member base. “We relaunched the business to
potential new members, but we also approached our 300,000+ former members. They consistently told us ours were the best clubs they’d ever been members of: big gym fl oors so they never had to queue, a great group exercise timetable across three or four large studios, 25m pools, hydrotherapy pools, heat treatments, squash, big changing rooms, hundreds of car parking spaces… And they said they’d come back if we gave the clubs a bit of TLC. “Our existing members said similar:
they’d stay as long as we remained open, but we needed to invest in the clubs. “So in mid-2013, we started a
refurbishment project across the whole estate – not only the gym fl oors, with new functional zones, brand new Pulse CV and resistance, but also the studios,
August 2015 © Cybertrek 2015
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 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92