Elevate Arena
Elevate Arena
Elevate Arena
Health Club Management

Health Club Management

Follow Health Club Management on Twitter Like Health Club Management on Facebook Follow Health Club Management on Google+ Join the discussion with Health Club Management on LinkedIn Subscribe to Health Club Management Get RSS alerts from Health Club Management magazine
Get the latest news, jobs and features in your inbox
Health Club Management

Health Club Management

features

Interview: Steen Albrechtslund, Fitness World

The CEO of Danish operator Fitness World talks to Kate Cracknell about his plans for a business that already counts 12 per cent of Danes as members

By Kate Cracknell, Health Club Management | Published in Health Club Management 2018 issue 2
Steen Albrechtslund
Steen Albrechtslund
Think about when you go into a theatre – how you’re catapulted into the environment and the experience. That’s what we’re trying to achieve from a consumer perspective

When I joined Fitness World back in October 2015, I was surprised by the lack of differentiation between the brands in the market,” comments Steen Albrechtslund, CEO of Denmark’s largest health club chain, Fitness World. “There are the high-end boutiques that tell their own compelling story, but among the big chains – whether you’re in Europe, Asia or the US – there’s very little differentiation, very little attempt to tell a branded story within the four walls of the club compared to other retail sectors, such as apparel.”

He continues: “I came to Fitness World directly from a retail role and with a very strong retail background that included running my own watch and jewellery company, which we ultimately sold to Fossil. In that business, we had our own branded channels – hundreds of our own retail outlets – and we very, very carefully managed the brand experience within those outlets.

“That’s the approach I’m now trying to apply here at Fitness World because in my mind, we aren’t fitness operators. We’re health and fitness retailers.

Learning from retail
He continues: “We’re setting out to tell a distinctive story in our clubs, including using signature colours, décor and equipment. We want to create a branded environment that strengthens the member experience, that has an impact the moment you come into the club. Think about when you go into a theatre – how you’re catapulted into the environment and the experience. That’s what we’re trying to achieve from a consumer perspective in our clubs.

Space Optimisation
“On the operational side of things, I’m extremely focused on the idea of space optimisation. When I travel around, both to other operators’ clubs and to our own, I see a lot of high-value space being wasted.

“In retail, you have to optimise space by selling what sells best. That sounds pretty obvious, but ask yourself this: do you really analyse what sells best? In retail, you have people whose entire job is to analyse what SKUs are being sold and what SKUs aren’t selling. The latter you remove from the retail space, replacing them with the former – and you also product/develop the former, so you have exactly the right colours, right price point, right materials and so on.

“You can apply exactly the same principle in fitness retail. Here, the SKU is the type of equipment. If you have a club profile where people are more into cardio, but a lot of the space is taken up by weights, that’s not optimised.

“Similarly in the studio, do we have the right SKUs in terms of classes – which ones are popular in that location and which aren’t? Get rid of the less popular classes and do more of what’s popular.”

The ecosystem
This willingness to identify, and then prioritise, what’s popular in each individual location has allowed Albrechtslund to apply what he calls an “ecosystem” approach to the Fitness World business.

He explains: “We went from being a single- to a multi-brand company in order to efficiently cover the market and tap into the different volume pools.

“Our core brand, Fitness World, sits in the low mainstream full-service segment, while our new Urban Gym brand is pure low-cost fitness. It’s accessible via members’ smartphones and has no staff or showers, just a small changing area in the middle of the gym floor – like you might see in a retail store.

“We launched Urban Gym with five clubs in the autumn of 2016 and we’ve now grown to 10 clubs. They’re all performing well ahead of forecast and we’re opening another batch this year.”

He continues: “In general, the Danish market is extremely focused on price – we have the highest penetration of all the discount grocery stores worldwide. That’s why we operate in the low mainstream and budget sector: this price sensitivity, combined with the small size of the market, means it would be very, very difficult to create a premium concept with a lot of scale in Denmark.

“But in fact, there are three dominant drivers in the Danish fitness market: location, price and classes. We aim to own them all. Location we certainly own: with it being such a small market, Danes expect everything to be nearby. We have 162 clubs, which means we’re always close to wherever people are.

“We’re also absolutely determined to own the entry price point in the Danish fitness market, as well as offering value for money across the board.

“And we offer the widest range of classes on the market, with about 60 different types of class.

“But this is where the ecosystem really kicks in because it allows us to deliver even better value for money and even more choice for our members.

“Again, this goes back to my retail experience: big retailers will have a flagship store that has all their SKUs in all sizes and all colours, and then scattered around it are satellite stores in an ecosystem. These satellite stores operate according to the 80:20 rule – you only need to stock the most popular SKUs there because these account for the majority of sales anyway. Then, if someone wants something you don’t stock, they don’t have too far to travel to get to your flagship store.

“We’ve tried to apply the same model at Fitness World. In each of our ecosystems, we’ll have one club that offers a wider range of classes and equipment, and then satellite stores – which might be Fitness World or Urban Gym – which only offer the most popular classes and the most used equipment in any given location. If you want specialist equipment or a more unusual class, you just hop on your bike and cycle a couple of kilometres to the flagship store.

“We’ve identified 28 ecosystems in the Danish market, with some volume pools that are still untapped. Obviously, when you have half a million members and 162 clubs in a population of 5.5 million – all living within a very small area – there are limits to your growth potential. However, there’s certainly still room for profitable growth in the Danish market.”

Moving beyond Denmark
“We’ve worked with a team of anthropologists to segment our market. We now have a detailed segmentation, spanning member age, gender and needs, which allows us to look at the whole Danish market to see exactly where we’re over- and under-represented. That’s a fantastic tool for us because it allows us to create solutions that fill the spaces in which we’re under-represented.

And it isn’t only Denmark that Fitness World is fine-tuning its presence in. The brand currently has 17 clubs in Poland, and further growth is on its mid-term radar. “We want to have quite a significant penetration in certain parts of Poland that we find more interesting than others, but even here, we’re looking at ecosystems more than we’re thinking in terms of traditional markets or countries with borders.”

Does that mean other countries might be on the radar too? “We haven’t done any in-depth analysis on that yet, because first of all, we want to make sure we have a very strong platform for growth. I took over a very successful company that had grown very fast; we now need to put new systems and structures in place before we can embark on a new growth phase.

“Firstly, we want to have profitable growth in Denmark: there’s some low-hanging fruit here. We need to explore all the different volume pools, assessing the number of potential members, but also their willingness to pay, which gives you the value pools.

“There are certain segments of volume and value pools in the Danish market that we’re currently under-represented in – where we have a lower market share than our overall market share. We’d like to provide solutions that cater for these segments. Whether that’s within our existing set-up or whether it’s via new brands and new propositions is still to be determined.”

He continues: “We also want to ensure we have all the moving parts in place in Poland: our clubs are performing positively, but we’re not quite there with our branding and marketing just yet.

“Then, when I feel it’s all running smoothly and we have the resources, that will be the time to investigate further growth opportunities – identifying new ecosystems and volume pools that are attractive to us, and looking at what solutions we might be able to bring to market within those ecosystems. It’s all about finding the right spaces with the right solutions.”

FITNESS WORLD FACT BOX

• Number of clubs in Denmark: 162

• Number of members in Denmark: 450,000+ (that’s 12 per cent of the Danish population)

• Number of clubs in Poland: 17

• Majority stakeholder: Norwegian private equity company FSN Capital

• Membership at Fitness World: €25–30 a month

• Membership at Urban Gym: €15 a month

ALBRECHTSLUND ON TECHNOLOGY

“The fitness business needs to be on its toes when it comes to digitisation, not only in terms of the member experience, but also in terms of avoiding getting trapped in the lower part of the value stack. It has to make sure it still has an influence over what customers are buying, and how they’re buying it, rather than being sidelined by new innovations that create a new market.

“One solution I see is for strategic partnerships: a big operator could team up with other complementary providers, such as sports clubs, to create one single subscription that gives full access to their combined services via an app. The consumer would have far more choice, while the operator would retain control over the experience.”

ABOUT THE AUTHOR

Kate Cracknell is the former editor and now editor-at-large of Health Club Management. Follow her on Twitter @healthclubkate

Albrechtslund uses retail analytics to establish which classes are most popular, and schedule more of these
Albrechtslund uses retail analytics to establish which classes are most popular, and schedule more of these
Fitness World offers a wide variety of class types, from group strength training to HIIT and cardio
Fitness World offers a wide variety of class types, from group strength training to HIIT and cardio
Flagship gyms offer the full programme of classes, with the most popular then made available at smaller local gyms
Flagship gyms offer the full programme of classes, with the most popular then made available at smaller local gyms
Urban Gym is the company’s low-cost brand
Urban Gym is the company’s low-cost brand
Albrechtslund is bringing retail principles to bear on fitness
Albrechtslund is bringing retail principles to bear on fitness
Fitness World, which is backed by private equity firm FSM Capital, has 17 clubs in Poland and is planning to open more
Fitness World, which is backed by private equity firm FSM Capital, has 17 clubs in Poland and is planning to open more
Albrechtslund suggests gym operators build partnerships with complementary businesses such as sports clubs
Albrechtslund suggests gym operators build partnerships with complementary businesses such as sports clubs
http://www.leisureopportunities.com/images/471725_790181.jpg
Danish chain Fitness World counts 12 per cent of Danes as members. CEO Steen Albrechtslund tells how he's used lessons from his retail background to achieve success...
Fitness On Demand
Fitness On Demand
Latest News
A new guide document on swimming pool safety – which all UK pool operators will ...
Latest News
The Bannatyne Group has completed a £750,000 upgrade of its Russell Square club in the ...
Latest News
A new £33m modular leisure complex, housing an Olympic-sized swimming pool, has been given the ...
Latest News
Boutique club operator Studio Lagree has opened its third London studio, at Nobu Hotel Shoreditch. ...
Latest News
Budget club operator Pure Gym has reached 1 million members in the UK, following a ...
Latest News
A consultation launched earlier today by not-for-profit health body ukactive will look to shape future ...
Latest News
Construction work has begun on a new leisure centre in Stone, Staffordshire, as part of ...
Latest News
A futuristic leisure centre, featuring an indoor street and winter garden running through the spine ...
Latest News
To coincide with National Apprenticeship Week in March, Leisure Opportunities is undertaking an employer survey ...
Latest News
The British public is being invited to take part in a national loneliness survey, launched ...
Latest News
The Thames Club in Staines, Surrey, has added a dedicated hot yoga studio to its ...
Catalogue Gallery
Click on a catalogue to view it online
Video Gallery
DFC: We do more...
DFC
DFC are a leading direct debit collection company, providing cash flow solutions to happy clients from all over the UK. Read more
More videos:
Company profiles
Company profile: Physical Company Ltd
Physical Company Ltd provides complete fitness solutions, including equipment, flooring, gym design, programming and training ...
Company profiles
Company profile: MoveGB
The Move online fitness platform enables operators to sell their own membership offers and packages ...
Directory
Architects/designers
Zynk Design Consultants: Architects/designers
Trade associations
International SPA Association - iSPA: Trade associations
Skincare
Sothys: Skincare
Software
Conceptek - Sistemas de Informacao, S.A.: Software
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Flooring
Rephouse: Flooring
Exercise equipment
Precor: Exercise equipment
Fitness assesment
MYZONE: Fitness assesment
Retail solutions
Swimrite Supplies Ltd / SRS Leisure: Retail solutions
Member access schemes
Move GB: Member access schemes
Featured suppliers
Featured supplier: Elevate 2018 will feature new thought leadership conference alongside trade exhibition
Thanks to increasing industry support Elevate, the UK’s largest physical activity trade event, has announced details of a new thought leadership conference.
Featured suppliers
Featured supplier: Increase sales with the brands your members trust
By 2019, the UK sports nutrition market is predicted to increase by a further eight percent to £527 million.
Property & Tenders
Stratford-upon-Avon
Stratford-on-Avon District Council
Property & Tenders
Diary dates
01-02 Mar 2018
BBC MediaCityUK, Salford, United Kingdom
Diary dates
05-09 Mar 2018
Various,
Diary dates
Job search
Elevate Arena
Elevate Arena