INTERVIEW


Ray Stenton Pa r tne r, No r thEdge Ca pi t al & non - e xec di r e c to r, Tot al Fi tne s s


Ray Stenton “O


ur investments are typically for three to five years, and in that timeframe I’d expect


Total Fitness to have grown to 100,000 members,” says Ray Stenton, partner at NorthEdge Capital – the private equity firm brought in at the time of the Total Fitness MBO to help drive the new growth phase of the business.


“There’ll also be at least one more full- service club and some other exciting, differentiated new formats too. “Beyond our ownership, I’d expect


there to be a more aggressive focus on opening new clubs and rolling out new formats. And the next owner will need to crack digital too, to really drive value. We’ll make some progress on that, but we won’t have all the answers during our ownership. It’s a huge opportunity though, and could be very interesting.” NorthEdge is what Stenton calls


a “generalist investor” whose model involves bringing broader business expertise to back management teams in delivering their plans. It focuses exclusively on northern-based businesses and has invested a reported £11.5m in Total Fitness – this in addition to the funds being invested by the management team – which Stenton sees as “an interesting growth opportunity”. He elaborates: “People are getting


more health-aware. At the same time the market is polarising into full-service versus self-service, and I believe Total


Closed in 2011, the Wrexham site has now re-opened after a £1m overhaul


Fitness has a unique offer within that: it’s at the top end in terms of its broad full-service proposition – not stuck in the squeezed mid-market – but its price point means it’s also high value. “We need to invest in the facilities


to ensure they’re at the standard we would wish them to be – we’ve already embarked on a signifi cant CapEx project across the estate – but once that’s completed, we’ll absolutely be competing with the likes of David Lloyd rather than the budget operators. “But it’s a very competitive market and


we have to stay focused on the detail. Good facilities aren’t enough – you have to continually stimulate and innovate.”


Opportunistic growth He continues: “With that in mind, our growth agenda is about looking at the business differently: investing in people, IT, facilities. The business has grown well with limited investment and there’s a real opportunity to build on that. “There’ll be opportunistic new site


openings based on acquisition – we’re looking at two or three possibilities at the moment. New builds aren’t on the immediate radar, although we might consider it were the right site to come up. But there are a number of former Total Fitness sites that were sold during the restructuring of the business, and they’re the most obvious things to look at if we can get them to work; the Wrexham re- opening was the fi rst of those.


36 Read Health Club Management online at healthclubmanagement.co.uk/digital


We’re looking at


new formats, such as the ‘pay as you go’ city centre boutique clubs and other standalone offerings


“We’re looking closely at our digital


strategy too, and at new formats like the ‘pay as you go’ city centre boutique clubs and other standalone offerings. It’s a different market dynamic from London, where we’ve seen the majority of the boutique clubs opening, but we need to be clear what people want – we’re already seeing indoor cycling centres and boxing clubs in the north of England. “In fact we’re doing a lot of work with


NPS generally, so our investments are based on an understanding of what members really want. We’ll test various things to see what works and then roll the successful concepts out.” ●


August 2015 © Cybertrek 2015


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