Ley says the arrival of budget gyms has made Total Fitness more unique, and it can now operate in a less crowded market
Warwi c k L ey Pa r tne r, RooGr e en Ventur es & ch a i r, Tot al Fi tne s s
“I
’m the mid-way point between Richard and Ray: 50 per cent operational and 50 per cent investor,”
explains Warwick Ley, chair of Total Fitness and partner of RooGreen Ventures, the turnaround fund brought in by Total Fitness’ previous owners – Barclays Bank and Co-op Bank – to set the business back on track. “Back in 2012, when we were asked
by the banking syndicate to get involved, we – my colleague Brian Davidson and I – replaced the incumbent board. Our whole model for a turnaround is to get in there, get the sleeves rolled up, reset the strategy and often rebuild the management team – although at Total Fitness there are some cracking veterans who’ve been with us all the way, and I’m delighted for them and what it means to them.” He continues: “I personally came
up through the private equity and advisory route, spending many years in restructuring for one of the big four professional services fi rms, which is when I met Brian – we were advising on the management buy-out of a manufacturing business of which he was CEO. “In 2005, a few of us broke away
from Ernst & Young to set up a private equity house – a turnaround fund called Endless LLP. One of our investments
August 2015 © Cybertrek 2015
was Crown Paint, and we parachuted Brian in as CEO; I was chair. We took the business from losing £20m a year to making £22m – this at the time Lehmans went bust, when the housing market collapsed and the paint market with it. “Following on from that, Brian and
I decided we’d like to do something together – Total Fitness-type deals – and we set up turnaround specialist RooGreen Ventures. We go in, we will in certain circumstances put in some cash ourselves, but fundamentally what we’re there to do is fi x the company, get it back on track strategically, get its management structure back on track – and that means a lot of sleeves rolled up, heavy working for an initial six- to 12-month period. All being well we then ease back on our time involvement, take a shareholding in the business and drive it forward for growth.”
Worth fixing In the case of Total Fitness, no money was invested upfront by RooGreen –
“the equity in the business was worth nothing”. It was simply a case of Barclays and Co-op asking Ley and Davidson to help sort out the problems. The pair agreed but, stresses Ley: “I was very clear that, for us to get involved, we needed the banks to continue to support the business financially, and not
Warwick Ley
I’m happy to admit it – I was so wrong back in 2012 when I hoped the project wouldn’t be Total Fitness
Read Health Club Management online at
healthclubmanagement.co.uk/digital
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