The Gym Group: Clustering Units & Post-Covid Customer Behaviour
Founder of The Gym Group
inpractise.com/articles/the-gym-group-clustering-units-and-post-covid-customer-behaviour
The Gym Group: Clustering Units & Post-Covid Customer Behaviour(January 24, 2024)
John Treharne
Founder of The Gym Group
John is the Founder of The Gym Group and has over 30 years experience building and scaling gyms in the UK. In 1991, he started Dragons Gym, a PE-backed family gym, which he grew to list on AIM in 1997 before selling to competitor Crown Sports in 2001. John then ran Crown Sports for 3 years before opening the first low-cost gym in the UK in 2007. John scaled The Gym Group to over 180 gyms today and is currently a Founder Director of the business.
Interview Transcript
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Let's say PureGym opens within the same catchment area, say within five to seven minutes. How would you expect your unit to perform over two to three years, starting from the initial marketing push from PureGym? As you mentioned, you might lose a certain percentage of members. How does that typically evolve?
As you may know, our primary driver is confidence in a 30% return. We utilize a sophisticated program, which, based on our knowledge of 230 sites, calculates and takes into account competition. This program predicts the number of members a site will attract, considering the demographic profile and competition. If our financial model indicates a 30% return based on these predictions, we proceed with the site. However, if it shows a 25% return, we likely won't.
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You mentioned that competition is somewhat rational, as the top players are aware of planning and where each other are going. How do you view the behavior of independent or small-scale gyms?
The impact varies. It largely depends on the type of independent gym. Many independents, particularly franchise operators, are much smaller, with a maximum of 5,000 square feet. We know that if they come near us, we can offer a better facility due to their smaller size and less equipment. If an énergie or Anytime Fitness opens close to us, there are countless examples where they go out of business quickly, like in Bracknell and Hemel Hempstead.
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