GET HCM
magazine
Sign up for the FREE digital edition of HCM magazine and also get the HCM ezine and breaking news email alerts.
Not right now, thanksclose this window
FIBO Exhibition
FIBO Exhibition
FIBO Exhibition
Follow Health Club Management on Twitter Like Health Club Management on Facebook Join the discussion with Health Club Management on LinkedIn Follow Health Club Management on Instagram
UNITING THE WORLD OF FITNESS
Health Club Management

Health Club Management

News

Pandemic cuts The Gym Group's revenues by half, but company eyes return to growth

During 2020 we demonstrated the resilience of our business and its culture, even in the most challenging of times
– Richard Darwin, CEO The Gym Group

The Gym Group saw its revenues cut by nearly half during the pandemic, a direct result of the group losing 45 per cent of its trading days during 2020.

Announcing its full-year results (the year ending 30 December 2020), the budget chain reported revenues of £80.47m – down 47.4 per cent from the £153.13m recorded in 2019.

The bottom line was hit harder, as the company announced pre-tax losses of £46.5m – signalling a 433 per cent fall from the £14m profit reported for 2019.

The Gym Group lost more than a quarter (27.2 per cent) of its members during the pandemic, with the number of memberships across its sites falling from 794,000 in December 2019 to 578,000 in December 2020.

In the two months since December 2020, the group has lost a further 31,000 members – as of 28 February, it had a total of 547,000 members.

Despite the disruption, the operator opened eight new sites during 2020, taking the total number of clubs in its estate to 183.

The pandemic has also resulted in the penetration of its premium LIVE IT offer increasing. A total of 22.5 per cent of its members are now on the LIVE IT membership, compared with a penetration rate of 18.9 per cent in 2019.

As health clubs in England are preparing for reopening on 12 April – with Scottish gyms to follow on 26 April – Gym Group CEO Richard Darwin said the company was now "ready to rebuild membership and return to growth", and that it would reopen in a cashflow positive position – likely to be the only health and fitness operator to do so, due it its low gearing.

“During 2020 we demonstrated the resilience of our business and its culture, even in the most challenging of times," Darwin said.

"By freezing subscriptions when closed and by providing an excellent COVID-secure environment in our gyms when open, we have retained most of our members.

"By supporting colleagues with topped-up furlough pay, honest communications and a comprehensive wellbeing plan we have high levels of staff retention and engagement.

"What more, by managing cash carefully we will emerge from the crisis with manageable levels of debt (£58m of non-property debt).

"We are ready to start rebuilding our memberships levels and growing our estate from 12 April, extending affordable fitness at a time when health and fitness has never been more important.”

Analysts at investment bank Liberum expect Gym Group to seek another loan deal later this year, in order to fuel its growth.

"While £42m of liquidity remains, we expect that another covenant reset in June will be required to unlock funding and to take full advantage of the plentiful new site opportunities – and bring openings back up to the 15-20 per year levels," Liberum said in its analysis.

Darwin added that although the company – along with the entire health club sector – was disappointed in the level of financial support offered by the government during the pandemic, especially around VAT – the group remains positive about growing its operations once facilities are reopened.

"We were disappointed that some of the arguments we made, as an industry, fell on deaf ears," Darwin said.

"The benefits of health and fitness clearly weren't deemed as substantial enough for us to be put on a level playing field with hospitality.

"But it's not all about support. We – and a couple of other companies in the sector – have demonstrated that even without a great deal of assistance we can drive stronger levels of expansion and create high-quality products for our members.

"So, as we restart our expansion drive, that's what we intend to do. We are pretty focused on not waiting for more government support but actually getting on and growing our membership and our estate."

Darwin said any COVID-19 recovery programmes on offer would be delivered through its network of personal trainers.

"We will certainly be encouraging our PTs to offer recovery programmes and I believe there will be a good level of demand from people looking for such schemes," Darwin said, adding that the group has retained around 1,400 of its 1,500 PTs during the pandemic.

The Gym Group's share price has rallied since reopening was announced and currently stands at £2.44 per share (18 March 2020) against a low of £0.75 on 20 March 2020.

The company published social impact data earlier this week which showed that it generated £1.8bn in social value since 2016. Find out more here.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
The Gym Group saw its revenues cut by nearly half during the pandemic, a direct result of the group losing 45 per cent of its trading days during 2020.
PTS,HAF,FIT,IND
2021/THUMB347374_664317_432725.jpg
Latest News
Jan Spaticchia, founder and chair of énergie Fitness has died aged 51 following a short ...
Latest News
A new pioneering approach looks to help cancer patients prepare for and respond to treatment ...
Latest News
Peloton is recalling all of its Tread and Tread+ machines in the US, after striking ...
Latest News
Health club operator Bannatyne is repositioning itself as a wellness provider, as it looks to ...
Latest News
Health clubs and leisure centres in Northern Ireland reopened their doors on Friday 30 April, ...
Latest News
It's time to refocus on the changing needs of older adults, according to a new ...
Latest News
In breaking news, HCM understands that David Lloyd Leisure's Glenn Earlam will move from his ...
Latest News
Sport England has reported a drop of 710,000 in the number of people classed as ...
HCM Magazine
Sponsored
Technogym’s support & innovative products have brought my dream to life
HCM Magazine
Sponsored
Craig Cocking was appointed Life Fitness UK’s country manager in December, following over 13 years with the business. He reflects on the impact of the past 12 months and shares his views on the future of the industry
HCM Magazine
HCM People
When women train on half-truths and crap science it’s painfully limiting
HCM Magazine
Sponsored
We talk to Dave Wright, CEO of Myzone, about the world’s first interchangeable heart rate monitor that provides real-time feedback – and the impact of COVID-19
HCM Magazine
Sponsored
More than 30,000 Hussle users have been turned into direct members in the last 18 months. Find out how Hussle can help your business bounce back
HCM Magazine
Editor's letter
Groundbreaking research from around the world is proving the many ways exercise can support health and creating opportunities for the sector to be more valued and useful
HCM Magazine
Sponsored
Matrix Fitness is launching a new three-tiered cardio range to provide total versatility, explains Matt Pengelly
HCM Magazine
HCM magazine
HCM People

Helena Field

Wellbeing by Rangeford Villages
The idea was to weave a wellness culture into the fabric of village life by incorporating movement, rest and relaxation, nutrition, connectedness, purpose and environment
HCM magazine
Fitness, wellness and recovery are driving new investments in the hotel and resorts market, with Kerzner the latest to enter this space, as Megan Whitby reports
Opinion
promotion
The UK’s first dedicated leisure development framework has completed its first four-year term with £144m committed investment in public leisure projects.
Opinion: UK’s first leisure framework celebrates £144m investment in public leisure
Featured supplier news
Featured supplier news: Precor supports Aneurin Leisure Trust in three-site refurbishment
Welsh leisure trust, Aneurin Leisure (ALT), has announced it’s forging ahead with a £600,000 (US$821,000, €696,000) gym refurbishment in all three of its leisure centres.
Featured supplier news
Featured supplier news: Red light therapy improves sleep, aids recovery and enhances focus
Offering red light therapy to your members can create a valuable source of secondary spend, while also supporting them with their recovery and delivering improvements to mobility, circulation and muscle soreness.
Company profiles
Company profile: Everyone Active
Everyone Active operates leisure centres in partnership with local councils across the UK. Today, Everyone ...
Company profiles
Company profile: Crown Sports Lockers
Crown Sports Lockers has designed, crafted and fitted bespoke timber furniture for spas, hotels and ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Lockers/interior design
Crown Sports Lockers: Lockers/interior design
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Skincare
Sothys: Skincare
Architects/designers
Zynk Design Consultants: Architects/designers
Trade associations
International SPA Association - iSPA: Trade associations
Spa software
SpaBooker: Spa software
Uniforms
Service Sport: Uniforms
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Fitness equipment
Precor: Fitness equipment
Wearable technology solutions
MyZone: Wearable technology solutions
Property & Tenders
Diary dates
07-09 Jun 2021
Virtual summit,
Diary dates
12 Jun 2021
Worldwide, Various,
Diary dates
13-14 Jun 2021
Online,
Diary dates
01-04 Jul 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
18-19 Sep 2021
Locations worldwide,
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
28-29 Sep 2021
ExCeL London, London, United Kingdom
Diary dates
04-07 Nov 2021
Exhibition Centre , Cologne, Germany
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates

News

Pandemic cuts The Gym Group's revenues by half, but company eyes return to growth

During 2020 we demonstrated the resilience of our business and its culture, even in the most challenging of times
– Richard Darwin, CEO The Gym Group

The Gym Group saw its revenues cut by nearly half during the pandemic, a direct result of the group losing 45 per cent of its trading days during 2020.

Announcing its full-year results (the year ending 30 December 2020), the budget chain reported revenues of £80.47m – down 47.4 per cent from the £153.13m recorded in 2019.

The bottom line was hit harder, as the company announced pre-tax losses of £46.5m – signalling a 433 per cent fall from the £14m profit reported for 2019.

The Gym Group lost more than a quarter (27.2 per cent) of its members during the pandemic, with the number of memberships across its sites falling from 794,000 in December 2019 to 578,000 in December 2020.

In the two months since December 2020, the group has lost a further 31,000 members – as of 28 February, it had a total of 547,000 members.

Despite the disruption, the operator opened eight new sites during 2020, taking the total number of clubs in its estate to 183.

The pandemic has also resulted in the penetration of its premium LIVE IT offer increasing. A total of 22.5 per cent of its members are now on the LIVE IT membership, compared with a penetration rate of 18.9 per cent in 2019.

As health clubs in England are preparing for reopening on 12 April – with Scottish gyms to follow on 26 April – Gym Group CEO Richard Darwin said the company was now "ready to rebuild membership and return to growth", and that it would reopen in a cashflow positive position – likely to be the only health and fitness operator to do so, due it its low gearing.

“During 2020 we demonstrated the resilience of our business and its culture, even in the most challenging of times," Darwin said.

"By freezing subscriptions when closed and by providing an excellent COVID-secure environment in our gyms when open, we have retained most of our members.

"By supporting colleagues with topped-up furlough pay, honest communications and a comprehensive wellbeing plan we have high levels of staff retention and engagement.

"What more, by managing cash carefully we will emerge from the crisis with manageable levels of debt (£58m of non-property debt).

"We are ready to start rebuilding our memberships levels and growing our estate from 12 April, extending affordable fitness at a time when health and fitness has never been more important.”

Analysts at investment bank Liberum expect Gym Group to seek another loan deal later this year, in order to fuel its growth.

"While £42m of liquidity remains, we expect that another covenant reset in June will be required to unlock funding and to take full advantage of the plentiful new site opportunities – and bring openings back up to the 15-20 per year levels," Liberum said in its analysis.

Darwin added that although the company – along with the entire health club sector – was disappointed in the level of financial support offered by the government during the pandemic, especially around VAT – the group remains positive about growing its operations once facilities are reopened.

"We were disappointed that some of the arguments we made, as an industry, fell on deaf ears," Darwin said.

"The benefits of health and fitness clearly weren't deemed as substantial enough for us to be put on a level playing field with hospitality.

"But it's not all about support. We – and a couple of other companies in the sector – have demonstrated that even without a great deal of assistance we can drive stronger levels of expansion and create high-quality products for our members.

"So, as we restart our expansion drive, that's what we intend to do. We are pretty focused on not waiting for more government support but actually getting on and growing our membership and our estate."

Darwin said any COVID-19 recovery programmes on offer would be delivered through its network of personal trainers.

"We will certainly be encouraging our PTs to offer recovery programmes and I believe there will be a good level of demand from people looking for such schemes," Darwin said, adding that the group has retained around 1,400 of its 1,500 PTs during the pandemic.

The Gym Group's share price has rallied since reopening was announced and currently stands at £2.44 per share (18 March 2020) against a low of £0.75 on 20 March 2020.

The company published social impact data earlier this week which showed that it generated £1.8bn in social value since 2016. Find out more here.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
The Gym Group saw its revenues cut by nearly half during the pandemic, a direct result of the group losing 45 per cent of its trading days during 2020.
PTS,HAF,FIT,IND
2021/THUMB347374_664317_432725.jpg

News

Jan Spaticchia, founder and chair of énergie Fitness has died aged 51 following a short
A new pioneering approach looks to help cancer patients prepare for and respond to treatment
Peloton is recalling all of its Tread and Tread+ machines in the US, after striking
Health club operator Bannatyne is repositioning itself as a wellness provider, as it looks to
Health clubs and leisure centres in Northern Ireland reopened their doors on Friday 30 April,
It's time to refocus on the changing needs of older adults, according to a new
fibodo Limited
fibodo Limited
Marc Jones has joined Fitronics, the company behind The Retention People (TRP) and CoursePro, in
In breaking news, HCM understands that David Lloyd Leisure's Glenn Earlam will move from his
Sport England has reported a drop of 710,000 in the number of people classed as
Independent gyms in the UK have fared better during the pandemic than larger corporate operators
Actor Mark Wahlberg has officially joined Power Plate as an investor in parent company, Performance
Fitness and health are priority areas of expenditure for consumers in six key nations around
Taking antihistamines prior to exercise can prevent the body from getting the full benefit of
Crown Sport Lockers (UK) Ltd
Crown Sport Lockers (UK) Ltd
The industry is eagerly awaiting the reopening of health clubs and leisure centres in another
Sport England has teamed up with Youth Sport Trust to develop a new online resource
Rowbots, the boutique fitness brand co-founded by star footballer Gareth Bale, has revealed plans to
Steven Schwartz, CEO of Midtown Athletic Clubs, has announced the sale of the company's Midtown
United Fitness Brands (UFB), the recently launched ‘supergroup’ of boutique fitness brands, has acquired Barrecore,
Global boutique fitness giant, Xponential Fitness, has refused to comment on rumours it's considering an
A study by virologists at Imperial College London, which is awaiting peer-review, suggests the risk
Miha Bodytec GmbH
Miha Bodytec GmbH
With gyms and leisure centres in England reopened, and the rest of the UK due
International luxury hotel group Kempinski has launched a new room category, which it will market
The FIT Summit has unveiled the final shortlists for the 2021 Fitness & Wellness Awards
Global Wellness Summit
Global Wellness Summit
1 - 20 of 11,879
HCM Magazine
Sponsored
Technogym’s support & innovative products have brought my dream to life
HCM Magazine
Sponsored
Craig Cocking was appointed Life Fitness UK’s country manager in December, following over 13 years with the business. He reflects on the impact of the past 12 months and shares his views on the future of the industry
HCM Magazine
HCM People
When women train on half-truths and crap science it’s painfully limiting
HCM Magazine
Sponsored
We talk to Dave Wright, CEO of Myzone, about the world’s first interchangeable heart rate monitor that provides real-time feedback – and the impact of COVID-19
HCM Magazine
Sponsored
More than 30,000 Hussle users have been turned into direct members in the last 18 months. Find out how Hussle can help your business bounce back
HCM Magazine
Editor's letter
Groundbreaking research from around the world is proving the many ways exercise can support health and creating opportunities for the sector to be more valued and useful
HCM Magazine
Sponsored
Matrix Fitness is launching a new three-tiered cardio range to provide total versatility, explains Matt Pengelly
HCM Magazine
HCM magazine
HCM People

Helena Field

Wellbeing by Rangeford Villages
The idea was to weave a wellness culture into the fabric of village life by incorporating movement, rest and relaxation, nutrition, connectedness, purpose and environment
HCM magazine
Fitness, wellness and recovery are driving new investments in the hotel and resorts market, with Kerzner the latest to enter this space, as Megan Whitby reports
HCM magazine
Lack of exercise is a major cause of death from COVID-19, according to new research, with only advanced age and organ transplant leading to greater risk
HCM magazine
Switzerland’s no frills chain, NonStop Gym, has appointed Funxtion to create its member training app, as CEO Ernst De Neef explains
HCM magazine
We’re going after health club and spa management contracts for hotels and independent gyms and also planning to launch a You Fit franchise
HCM magazine
A new report, conducted by Deloitte, analyses the growth of the Chinese fitness industry and the outlook ahead, as Kristen Walsh reports
HCM magazine
The health and fitness industry felt as though it wasn’t invited to its own party when news of the government’s Fit Miles programme broke. But what does it actually mean and is it good or bad news for the sector? Kath Hudson investigates
HCM magazine
For years the health and fitness sector has aspired to be taken seriously by the health sector. Is now the time? asks Kath Hudson
HCM magazine
Opinion
promotion
The UK’s first dedicated leisure development framework has completed its first four-year term with £144m committed investment in public leisure projects.
Opinion: UK’s first leisure framework celebrates £144m investment in public leisure
Featured supplier news
Featured supplier news: Precor supports Aneurin Leisure Trust in three-site refurbishment
Welsh leisure trust, Aneurin Leisure (ALT), has announced it’s forging ahead with a £600,000 (US$821,000, €696,000) gym refurbishment in all three of its leisure centres.
Featured supplier news
Featured supplier news: Red light therapy improves sleep, aids recovery and enhances focus
Offering red light therapy to your members can create a valuable source of secondary spend, while also supporting them with their recovery and delivering improvements to mobility, circulation and muscle soreness.
Company profiles
Company profile: Everyone Active
Everyone Active operates leisure centres in partnership with local councils across the UK. Today, Everyone ...
Company profiles
Company profile: Crown Sports Lockers
Crown Sports Lockers has designed, crafted and fitted bespoke timber furniture for spas, hotels and ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Lockers/interior design
Crown Sports Lockers: Lockers/interior design
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Skincare
Sothys: Skincare
Architects/designers
Zynk Design Consultants: Architects/designers
Trade associations
International SPA Association - iSPA: Trade associations
Spa software
SpaBooker: Spa software
Uniforms
Service Sport: Uniforms
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Fitness equipment
Precor: Fitness equipment
Wearable technology solutions
MyZone: Wearable technology solutions
Property & Tenders
Diary dates
07-09 Jun 2021
Virtual summit,
Diary dates
12 Jun 2021
Worldwide, Various,
Diary dates
13-14 Jun 2021
Online,
Diary dates
01-04 Jul 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
18-19 Sep 2021
Locations worldwide,
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
28-29 Sep 2021
ExCeL London, London, United Kingdom
Diary dates
04-07 Nov 2021
Exhibition Centre , Cologne, Germany
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
Search news, features & products:
Find a supplier:
FIBO Exhibition
FIBO Exhibition