HCM Issue 4 2021

Page 37


Each month we were closed in the latest lockdown cost us roughly £2.5m and from the first quarter of this year, we have pre-tax losses of around £7.5m to start clawing back now we’re open again What’s the big picture strategy as you rebuild?

The main strategy will be positioning ourselves as a wellness provider, which I believe can be a USP for us. It’s very easy to pitch yourself as a gym or health club or spa, but we have all the elements needed to look after people’s wellness. This facility mix is why – although people try and pigeonhole us as a mid-market provider due to our price tag – I don’t think we are. We have gyms, but we also have physiotherapy on every site, café bar areas for a social element and spas at 48 of our clubs. We want to integrate the offering around these and get that holistic message across. It suits our member profile, too. We’re never going to be a hard-edged, purely workoutbased product. We’re never going to have 26,000sq ft clubs catering for 6,000–7,000 members. Our members will always have space to relax, space to experience the spa, space to enjoy the café bars. That’s what we’re all about, and it’s why we’ll be adding more of our facilities to more of our older clubs – spas, for example, where these don’t currently exist. We’ve perhaps been guilty in the past of not looking at our business as one entity, but rather as separate departments – a gym here, a spa there, a physio there. We need a change in mentality, and this is what I’m trying to instil in the whole team, from the top down. We need to train our staff so they know more about each part of the business, and we need to be more persuasive with our members. I want them to understand it isn’t

just about fitness, but about feeling better as a person – physically and mentally – and that taking advantage of more of our complementary services will help them achieve this. It’s early days, but the long-term intention will certainly be to create wellness programming that brings together the different aspects of what we do. Would you ever build standalone spas?

Our spa product is currently more akin to a retail product than a subscription model and while we do sell spa access and treatments to aggregators, I don’t see it as a standalone product. Our spas and gyms are joined at the hip. The spa benefits from there already being a pool, steam and sauna on-site, plus even the gym floor and yoga classes. Meanwhile, gyms with a spa are more profitable than gyms without: on average they add 20–25 per cent to the profitability of a location. So spa is a great complementary product, and will hopefully become even more so as we reposition along wellness lines, encouraging more members to take advantage of even better prices than we give to aggregators. What are your recovery and growth projections?

We haven’t been overly ambitious in our recovery plan, but – provided there are no further restrictions or a significant increase in infection rate – I expect us to be profitable at EBITDA level and cash-generative as a business as we come out of the summer. ©Cybertrek 2021 Issue 4 2021