Health Club Management July 2019

Page 40


GET Alicia Whistlecroft from Deloitte asks if the UK boutique health and fitness sector is capable of attracting the funding it needs


he UK health and fitness industry has developed and evolved rapidly over the last 35 years into a relatively mature yet still attractive, growing market. The Leisure Database Company published ‘The 2019 State of the UK Fitness Industry Report’ in May 2019, which estimated that the fitness market is valued at £5.1bn, an increase of 4.2 per cent on 2018. Moreover, it projects a compound annual growth rate of c.8.5 per cent in value and c.5.0 per cent in the number of gyms and health clubs over the next five years. However, this is an industry faced with the need to make constant advances in product and delivery, as the customers continue to become more educated and aware of the benefits of different types of exercise on both physical and mental health. Over the last 10 years the main disruption in the UK has been the strong growth of the budget operators, but more recently another storm has hit the industry – in the form of the boutique fitness operators. The development of the boutique sector is potentially much more diverse in its impact than the growth of the budget operators. It is also much more challenging from a funding perspective with the need for specialisation and sustainable differentiation being more important than scale. The following article considers how this sector can attract the necessary funding to make a real impact on the structure of the industry. WHAT IS A BOUTIQUE OPERATOR? There are three underlying elements that can be used to define a boutique business; a focus on a clearly defined (specialist) product, flexible and/or bespoke delivery 40 July 2019 ©Cybertrek 2019

Barry’s Bootcamp is going global with backing from North Castle Partners

of the product and an underlying desire to create a community amongst its customers. The focus is often on both a style of exercise and also the way in which it is delivered. Some sub-sectors are more developed, such as cycling, and some players, such as Barry’s Bootcamp, are already well on the way to achieving a strong international footprint. People enjoy the flexibility of boutique classes without having to be tied into a gym membership. Furthermore, with gym memberships it is very easy to find an excuse to go tomorrow, whereas with a class-based product, you book a class at a time and frequency to suit you, making you much more likely to attend, leading to increased commitment and consistency of training. Another significant differentiator of boutique fitness