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HCM People: Martin SeiboldCEO Life Fit Group

Gathering existing, strong brands under one roof to create the new Life Fit Group made perfect sense

Published in Health Club Management 2019 issue 8
After turning around Fitness First UK, Seibold was called back to do the same in Germany
After turning around Fitness First UK, Seibold was called back to do the same in Germany

The newly-launched Life Fit Group aims to have a presence in each of Germany’s booming fitness segments. CEO Martin Seibold says reviving the fortunes of Fitness First acted as the starting gun for the business.

Seibold is becoming somewhat of a turnaround specialist. In 2006, the then MD of Fitness First Germany was transferred to Fitness First UK, named its COO and tasked with turning the business around. After a successful two-year project, he was rewarded with a promotion to a global role.

When the UK business found itself in trouble again just a few years later, its private equity owner Oaktree Capital called Seibold back – this time as MD. Between 2012 and 2017 he again revived Fitness First UK, this time through a £40m+ transformation programme that repositioned the chain by nudging it upmarket and reducing the estate from 185 clubs to just 65.

After helping Oaktree sell the UK business to DW Fitness in 2016 he was then – in May 2017 – called on to perform a similar turnaround of Fitness First Germany.

In the two years since, he and the teams across the clubs haven’t as much resuscitated the business, as fitted it with new organs and given it a new purpose in life. What started as a three-year plan to prepare the estate for sale has become a long-term project to create a multi-brand group of companies featuring best-in-class operations in a number of vertical markets.

CHANGING DIRECTION
"Three years ago Fitness First Germany was in a very difficult state," Seibold says. "There was no clear vision or philosophy, and there was confusion over what the strategy was.

"There had been attempts to introduce new services and enter new segments – such as the launch of a boutique offering, efforts to move into the mind and body segment and to enter the digital space. But these had led to a further loss of focus on what the core product was.

"There wasn’t any innovation at the clubs either. The estate had some great locations and people, but the sites were full of outdated equipment."

Seibold set out to modernise the network. Most of the changes he instigated were simple – such as ditching the "garish brown and magenta" colour scheme, installing wifi access at every club and making sure equipment and programming were brought up to date.

In total, €15m was spent across the 60+-strong club portfolio, while around €6m of ‘unnecessary costs’ were taken out of the operation.

"Within 18 months we’d turned Fitness First Germany from an operator with an outdated offer to one which is at the forefront of innovation," Seibold said of the changes. "Our strategy was to be the operator that gets there first when it comes to new kit."

CHOOSING A FUTURE PATH
Once it was clear the company was back on track, its private equity owner Oaktree Capital was faced with a choice: what to do next? Should it continue to prepare the estate for sale, or adopt a different approach?

During discussions, an option which had recently been tested – and proven – on the other side of the world was brought up.

"I sat down with Federico Alvarez-Demalde, the senior VP at Oaktree, to consider our options," Seibold says. "He suggested that we might want to look at how Greg Oliver had grown a portfolio of fitness brands in Australia."

Oaktree was very familiar with Oliver’s Fitness & Lifestyle Group (FLG). Oaktree had sold Fitness First Australia to FLG in 2016 and kept a minority stake in the business. Since then, FLG has acquired a number of operators and become Asia-Pacific’s largest diversified fitness and wellness group with a portfolio that includes nine brands and around 500 sites.

Seibold recalls the conversation: "Federico said ‘Martin, fly to Australia and speak to Greg and his team. Check it out. If you come back and say that we can do in Germany what they’ve done there, we’ll go for it’."

STUDY VISIT
Seibold visited FLG in May 2018, spoke to Oliver and met the MDs of all the individual brands.

"It was an eye-opener," Seibold says. "Gathering existing, strong brands under one roof made perfect sense.

"Firstly, they could centralise a lot of the processes and leverage the cost base. Secondly, they were able to offer consumers recognised premium, budget and boutique studios without the need to build separate brands from scratch.

"Thirdly, it offered them flexibility in organising the estate. FLG had converted and ‘downgraded’ some of the smaller Fitness First clubs to run under the Goodlife brand – but also upgraded some of the larger Goodlife site to be branded Fitness First."

Seibold had made up his mind. "I came back, sat down with Oaktree and said ‘guys, we have to do this’."

GROWING AS A GROUP
Within six months of returning from his fact-finding mission, Seibold – with strong support from Oaktree – had negotiated the first deal. In December 2018, Fitness First acquired elbgym – a highly-regarded regional operator with three gyms in the city of Hamburg.

This was followed by the securing of rights to operate Barry’s Bootcamp in Germany and a deal to bring Dutch operator The Gym Society – headed by industry veteran Frank Polman – to Germany. Most recently, in July, a deal was struck to acquire budget operator Smile X and its 17 sites. The six-strong portfolio of companies is completed by the addition of digital fitness app NewMoove.

A new company – Life Fit Group – was then set up to oversee the six different brands, with Seibold named as CEO. The next stage will see the group expand in each segment.

Seibold says Frank Polman will be an asset in growing the business, due to his franchising experience gained from spreading the Curves brand across Europe. "We’re looking to franchise Elbgym, so its MD, Wilhelm Schröter, will be able to meet regularly with Frank and discuss strategy," Seibold says.

"That’s the beauty of what we’re doing – we aren’t just adding best-in-class brands, we are gathering best-in-class knowhow. As well as Frank’s franchising expertise, we have the boutique prowess of Barry’s Bootcamp and a deep understanding of the German budget market through Smile X and its strong management team, headed by Christian Müller.

"Life Fit’s management structure will reflect this – we’ll establish a round table system, where the individual CEOs of the companies come together to discuss our forward plans and to share their experiences."

As Life Fit prepares for the next, exciting stage, Seibold is keen to highlight the role played by Oaktree Capital – and especially Federico Alvarez-Demalde and his team. "As owners, they have been incredibly supportive and crucial in making this happen," Seibold says.

"Without Oaktree and its trust in me, our team and this process, it would not have been possible. The relationship we have is a great example of how private equity ownership can work and be a positive force in business."

Seibold has turned Fitness First Germany from an outdated offering to one at the forefront of innovation
Seibold has turned Fitness First Germany from an outdated offering to one at the forefront of innovation
Seibold and the teams across all the Fitness First Germany clubs have resuscitated the business
Seibold and the teams across all the Fitness First Germany clubs have resuscitated the business
Seibold’s strategy was to always have the newest kit
Seibold’s strategy was to always have the newest kit
Fitness First Germany’s private equity owner, Oaktree Capital, decided to build a diverse portfolio of fitness brands
Fitness First Germany’s private equity owner, Oaktree Capital, decided to build a diverse portfolio of fitness brands
http://www.leisureopportunities.com/images/imagesX/677431_906315.jpg
After reviving Fitness First Germany, Seibold is building a portfolio of fitness brands under new company, Life Fit Group
Martin Seibold, CEO Life Fit Group ,Martin Seibold, Life Fit Group,
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features

HCM People: Martin SeiboldCEO Life Fit Group

Gathering existing, strong brands under one roof to create the new Life Fit Group made perfect sense

Published in Health Club Management 2019 issue 8
After turning around Fitness First UK, Seibold was called back to do the same in Germany
After turning around Fitness First UK, Seibold was called back to do the same in Germany

The newly-launched Life Fit Group aims to have a presence in each of Germany’s booming fitness segments. CEO Martin Seibold says reviving the fortunes of Fitness First acted as the starting gun for the business.

Seibold is becoming somewhat of a turnaround specialist. In 2006, the then MD of Fitness First Germany was transferred to Fitness First UK, named its COO and tasked with turning the business around. After a successful two-year project, he was rewarded with a promotion to a global role.

When the UK business found itself in trouble again just a few years later, its private equity owner Oaktree Capital called Seibold back – this time as MD. Between 2012 and 2017 he again revived Fitness First UK, this time through a £40m+ transformation programme that repositioned the chain by nudging it upmarket and reducing the estate from 185 clubs to just 65.

After helping Oaktree sell the UK business to DW Fitness in 2016 he was then – in May 2017 – called on to perform a similar turnaround of Fitness First Germany.

In the two years since, he and the teams across the clubs haven’t as much resuscitated the business, as fitted it with new organs and given it a new purpose in life. What started as a three-year plan to prepare the estate for sale has become a long-term project to create a multi-brand group of companies featuring best-in-class operations in a number of vertical markets.

CHANGING DIRECTION
"Three years ago Fitness First Germany was in a very difficult state," Seibold says. "There was no clear vision or philosophy, and there was confusion over what the strategy was.

"There had been attempts to introduce new services and enter new segments – such as the launch of a boutique offering, efforts to move into the mind and body segment and to enter the digital space. But these had led to a further loss of focus on what the core product was.

"There wasn’t any innovation at the clubs either. The estate had some great locations and people, but the sites were full of outdated equipment."

Seibold set out to modernise the network. Most of the changes he instigated were simple – such as ditching the "garish brown and magenta" colour scheme, installing wifi access at every club and making sure equipment and programming were brought up to date.

In total, €15m was spent across the 60+-strong club portfolio, while around €6m of ‘unnecessary costs’ were taken out of the operation.

"Within 18 months we’d turned Fitness First Germany from an operator with an outdated offer to one which is at the forefront of innovation," Seibold said of the changes. "Our strategy was to be the operator that gets there first when it comes to new kit."

CHOOSING A FUTURE PATH
Once it was clear the company was back on track, its private equity owner Oaktree Capital was faced with a choice: what to do next? Should it continue to prepare the estate for sale, or adopt a different approach?

During discussions, an option which had recently been tested – and proven – on the other side of the world was brought up.

"I sat down with Federico Alvarez-Demalde, the senior VP at Oaktree, to consider our options," Seibold says. "He suggested that we might want to look at how Greg Oliver had grown a portfolio of fitness brands in Australia."

Oaktree was very familiar with Oliver’s Fitness & Lifestyle Group (FLG). Oaktree had sold Fitness First Australia to FLG in 2016 and kept a minority stake in the business. Since then, FLG has acquired a number of operators and become Asia-Pacific’s largest diversified fitness and wellness group with a portfolio that includes nine brands and around 500 sites.

Seibold recalls the conversation: "Federico said ‘Martin, fly to Australia and speak to Greg and his team. Check it out. If you come back and say that we can do in Germany what they’ve done there, we’ll go for it’."

STUDY VISIT
Seibold visited FLG in May 2018, spoke to Oliver and met the MDs of all the individual brands.

"It was an eye-opener," Seibold says. "Gathering existing, strong brands under one roof made perfect sense.

"Firstly, they could centralise a lot of the processes and leverage the cost base. Secondly, they were able to offer consumers recognised premium, budget and boutique studios without the need to build separate brands from scratch.

"Thirdly, it offered them flexibility in organising the estate. FLG had converted and ‘downgraded’ some of the smaller Fitness First clubs to run under the Goodlife brand – but also upgraded some of the larger Goodlife site to be branded Fitness First."

Seibold had made up his mind. "I came back, sat down with Oaktree and said ‘guys, we have to do this’."

GROWING AS A GROUP
Within six months of returning from his fact-finding mission, Seibold – with strong support from Oaktree – had negotiated the first deal. In December 2018, Fitness First acquired elbgym – a highly-regarded regional operator with three gyms in the city of Hamburg.

This was followed by the securing of rights to operate Barry’s Bootcamp in Germany and a deal to bring Dutch operator The Gym Society – headed by industry veteran Frank Polman – to Germany. Most recently, in July, a deal was struck to acquire budget operator Smile X and its 17 sites. The six-strong portfolio of companies is completed by the addition of digital fitness app NewMoove.

A new company – Life Fit Group – was then set up to oversee the six different brands, with Seibold named as CEO. The next stage will see the group expand in each segment.

Seibold says Frank Polman will be an asset in growing the business, due to his franchising experience gained from spreading the Curves brand across Europe. "We’re looking to franchise Elbgym, so its MD, Wilhelm Schröter, will be able to meet regularly with Frank and discuss strategy," Seibold says.

"That’s the beauty of what we’re doing – we aren’t just adding best-in-class brands, we are gathering best-in-class knowhow. As well as Frank’s franchising expertise, we have the boutique prowess of Barry’s Bootcamp and a deep understanding of the German budget market through Smile X and its strong management team, headed by Christian Müller.

"Life Fit’s management structure will reflect this – we’ll establish a round table system, where the individual CEOs of the companies come together to discuss our forward plans and to share their experiences."

As Life Fit prepares for the next, exciting stage, Seibold is keen to highlight the role played by Oaktree Capital – and especially Federico Alvarez-Demalde and his team. "As owners, they have been incredibly supportive and crucial in making this happen," Seibold says.

"Without Oaktree and its trust in me, our team and this process, it would not have been possible. The relationship we have is a great example of how private equity ownership can work and be a positive force in business."

Seibold has turned Fitness First Germany from an outdated offering to one at the forefront of innovation
Seibold has turned Fitness First Germany from an outdated offering to one at the forefront of innovation
Seibold and the teams across all the Fitness First Germany clubs have resuscitated the business
Seibold and the teams across all the Fitness First Germany clubs have resuscitated the business
Seibold’s strategy was to always have the newest kit
Seibold’s strategy was to always have the newest kit
Fitness First Germany’s private equity owner, Oaktree Capital, decided to build a diverse portfolio of fitness brands
Fitness First Germany’s private equity owner, Oaktree Capital, decided to build a diverse portfolio of fitness brands
http://www.leisureopportunities.com/images/imagesX/677431_906315.jpg
After reviving Fitness First Germany, Seibold is building a portfolio of fitness brands under new company, Life Fit Group
Martin Seibold, CEO Life Fit Group ,Martin Seibold, Life Fit Group,
Latest News
People from Black, Asian and minority ethnic (BAME) backgrounds are still far less likely to ...
Latest News
Those who used fitness trackers are twice as likely to enjoy their gym workout (61 ...
Latest News
Technogym has secured a deal to equip 30 Olympic training centres in Tokyo this year, ...
Latest News
Leisure trust 1610 will begin offering DNA testing to members at the leisure centres it ...
Latest News
David Lloyd Clubs has opened a pop-up restaurant in Hackney, London, designed specifically to complement ...
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Job search
POST YOUR JOB
Featured supplier news
Featured supplier: Your personal invite to SPATEX 2020
Organiser of SPATEX 2020, Michele Bridle cordially invites you to attend the industry’s event of the year.
Featured supplier news
Featured supplier: Gympass expands in Ireland with flagship operator Gym Plus
Gympass, a leader in corporate fitness sales, has expanded its network to Ireland following a new partnership with Gym Plus.
Opinion
promotion
Gyms need to look at ways to deploy technology that helps them engage with customers on a human level. This can be done by encouraging customers to leave as much real-time feedback as possible
Opinion: Customer Feedback: the Good, the Bad and the ‘Could be Improved’ Why health clubs need to take action in 2020 to retain their New Year customers
Video Gallery
How to use the MZ-Bodyscan
MyZone
The Best Product for the Best Clubs Read more
More videos:
Company profiles
Company profile: Wattbike
Wattbike is the creator of the world’s most advanced and innovative indoor bikes, developed in ...
Company profiles
Company profile: Stages Indoor Cycling
Stages Indoor Cycling is a product and technology company that is 100% focused on creating ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Fitness equipment
FunXtion International BV: Fitness equipment
Fitness software
Go Do.Fitness: Fitness software
Exercise equipment
Power Plate: Exercise equipment
Management software
Fisikal: Management software
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Lockers/interior design
Crown Sports Lockers: Lockers/interior design
Trade associations
International SPA Association - iSPA: Trade associations
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Professional services
Deloitte UK: Professional services
Audio visual
Hutchison Technologies: Audio visual
Property & Tenders
Derby City Council
Property & Tenders
Diary dates
28-30 Jan 2020
Ericsson Exhibition Hall, Ricoh Arena, Coventry, United Kingdom
Diary dates
29-30 Jan 2020
Holiday Inn San Francisco-Golden Gateway, San Francisco, United States
Diary dates
20 Feb 2020
The Old Truman Brewery, London, United Kingdom
Diary dates
06-07 Mar 2020
Palazzo del Ghiaccio, Milan, Italy
Diary dates
23-25 Mar 2020
Hilton, Barcelona, Spain
Diary dates
25 Mar 2020
Executive Boardroom, Middlesex University, London, United Kingdom
Diary dates
25-26 Mar 2020
Eastwood Hall, Nottingham, United Kingdom
Diary dates
26-29 Mar 2020
The Winter Gardens Blackpool, Blackpool , United Kingdom
Diary dates
19-24 Apr 2020
tbc, Beijing, China
Diary dates
04 Jun 2020
Marriott Forest of Arden Hotel & Country Club, Birmingham, United Kingdom
Diary dates
13 Jun 2020
Worldwide, Various,
Diary dates
17-18 Jun 2020
ExCeL London, London, United Kingdom
Diary dates
21-24 Sep 2020
Loews Coronado Bay Resort, Coronado, United States
Diary dates
17-23 Oct 2020
Pinggu, Beijing, China
Diary dates
30-31 Oct 2020
NEC, Birmingham, United Kingdom
Diary dates
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