ADDleisure launched for fitness investment

Three health club industry figures have launched an investment vehicle to capitalise on new opportunities in the leisure, health and fitness sectors.

Allan Fisher and David Turner, co-founders of Holmes Place and LA Fitness respectively and David Cummin, have launched ADDleisure, which floated on AIM this week.

The executive directors believe the rapid growth in the number of health and fitness facilities over the last five years and the current media and government focus on health present a number of opportunities for investment.

They say that pricing and service have become the main distinguishing features between operators and believe facilities will increasingly rely on technology and data management to support margins where pricing is competitive.

The directors also believe that product development has failed to keep pace with the increase in the number of facilities and as such, opportunities exist for highly differentiated leisure offerings.

“I am a strong believer in the services health clubs provide, but there is a large sector of the population that is disinclined to join a health club,” said chair, Allan Fisher. “We are looking at products and services that would attract that market, but would also act as an enhancement for those people who go to the gym.”

ADDleisure has initially raised £1.5m to fund initiatives across the sector, and already has a 75 per cent holding in Fitbug, the owner of an intelligent pedometer that prescribes activity, monitors progress and gives motivating feedback.

The product will allow a two-way communication between the member and a virtual club via an interactive website and regular electronic communications. This will allow online tracking of members to help them achieve their activity levels while managing their diet.

The product will be primarily marketed to the estimated 90 per cent non-gym members of the population via internet and retail distribution partners, although Fitbug will also provide additional solutions to work with the fitness club sector.

ADDleisure also holds a 28 per cent share of Liberation Fitness Systems, owner of the distribution rights in the UK and Ireland of the Power Plate range of products, which use vibration technology.

The company is also looking at the home fitness market, said Fisher: “Since 1998 the in-home fitness equipment market has grown by almost 50 per cent and is currently worth £250m.

“Forecasts suggest it will continue to show double-digit growth rates and we believe our experienced team can take advantage of this growth by initially further developing and marketing our existing products, and sourcing future investment opportunities.”

Fisher, Turner and technical director, David Cummin, have each invested £500,000 in ADDleisure, which has a market capitalisation of £5m. The proceeds of the placing will be used for the marketing and development of its existing products, for future investment opportunities, and for general working capital.

“Research has shown that a third of all adults will be obese by 2010 unless urgent action is taken now,” said Fisher.

“We believe our products will assist people in tackling health and fitness issues and make a significant contribution to the health of our nation if utilised. Both gym and non-gym members need education, instruction, feedback and motivation while fitness operators need tools to understand, engage, and manage their membership base.

“Importantly, the internet is now mature enough to play an integral role in enterprises in the health and fitness industry.