Annihilation of mid-market sector almost complete, says former Gym Group COO
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Annihilation of mid-market sector almost complete, says former Gym Group COO

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The "annihilation" of mid-market fitness operators has been the biggest major change in the industry during the last few years, the Gym Group's former chief operating officer has said.

In an interview with Health Club Management, Jim Graham, who left the operator in November, said the destruction of the mid-market was "all but complete", highlighting that many of the assets had been "poor" and lacked relevance to the mass market.

Over the past couple of years large operators such as LA Fitness and Fitness First UK have fallen to competition from budget gyms.

Pure Gym took over LA Fitness and its 43 clubs in May 2015, while DW Sports bought Fitness First UK and its 62-club portfolio in September 2016.

A report by commercial real estate company Colliers International in January found that budget gym operators with premises in Central London are paying 19 per cent more rent than mid-market rivals, due to the increase in demand from the low-cost sector.

The number of low-cost gyms opening in London surged by 46 per cent in 2016.

Looking ahead, Graham believes that the sector as a whole must "improve massively" on two fronts.

He said: "The first is the quality of customer service, in its widest possible sense, which at a sector level is typically poor and far too inconsistent. The second is in truly understanding individual customer needs and wants and then exploiting that insight to tailor the experience differently."

Graham, who was an operating partner at Phoenix Equity Partners before joining the Gym Group in April 2014, has returned the private equity sector.

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The "annihilation" of mid-market fitness operators has been the biggest major change in the industry during the last few years, the Gym Group's former chief operating officer has said.
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