The Gym Group Plans Launch of “Small Box” Model Across UK

LONDON, United Kingdom — The Gym Group is planning to roll out a scaled-down version of its gym in a bid to expand its footprint, following in the footsteps of rival PureGym,

Having acquired easyGym in 2018 and later integrating its sites under The Gym Group brand, the low-cost operator currently runs a whopping 165 sites across the UK.

However, CEO Richard Darwin is eyeing aggressive expansion in new markets following a report in collaboration with PricewaterhouseCoopers (PWC) that suggested the number of low-cost gyms could double by 2026 to between 1200 and 1400 locations.

The “slimmed down” small box sites planned by The Gym Group are expected to be between 5,000 sq ft and 9,000 sq ft, considerably more compact than their traditional locations, which average 15,500 sq ft in size.

Reported in Health Club Management, Darwin explained: “It offers us the opportunity to go into towns that wouldn’t previously have been on our target list, because they wouldn’t have been big enough – towns where the overall population is between 25,000 and 60,000.

“While we don’t have an exact target number of sites for the small box model yet, we did a study with PwC which showed that there could potentially be an additional 300 small box sites across the UK. So the volume is there.”

Rival low-cost chain PureGym launched its own scaled-down small gym model in 2018, beginning with Tunbridge and Buckingham. This has already grown to a seven-strong operation, with further sites in the pipeline.

“It wasn’t just about taking the PureGym model and cutting it down, but about creating a brand new proposition with new floor layouts and flexible space,” Francine Davis, PureGym’s commercial and strategic development director, told HCM.

“These are vibrant, friendly, local gyms, with semi-open studios, inviting usage when no classes are running.”

Last week Darwin announced YoY revenue increases of 26.9% to £74 million and pre-tax profits up 53.3% to £7.1 million for the first half of 2019, thanks, in part, to a £5 premium membership add-on option offered to all members.

According to Darwin, the “Live It” memberships, which include multi-site access and a bring-a-friend initiative, were introduced 18 months ago and adopted by 16.9% of its total membership, boosting yield per member by 5.6% to £15.47.

The Gym Group’s recent success will alert both low-cost operators and small-box boutiques of increasing competition in an already saturated UK market, which is becoming further squeezed by the arrival of US and Australian brands such as Peloton, SoulCycle and F45.

However, David Minton, Director of The Leisure Database, says The Gym Group’s strong performance, when compared alongside franchises, boutiques and the public sector, is simply further evidence that the fitness industry is enjoying a “golden period of growth”.

Minton highlighted the recent acquisition of low-cost fitness franchise Énergie Fitness by Bridges Fund Management and Third Space’s opening of The Yard in Canary Wharf, a similar scaled-down version of its traditional offering, at the start of 2019.

“The public sector has also returned to growth,” Minton added. “The largest public sector brand, Better, now has more fitness sites in the UK than The Gym Group.

“While our Boutique Studio London 2018 Report showed for the first time there are over 15,000 classes per week at boutique studios in London alone, the continued growth of budget brands shows the industry is expanding across all sectors.”

The Gym Group plans to open its first small-box format in Newark, Nottinghamshire, by the end of 2019 with a further roll-out across 2020.