Soho Gyms feels the heat from low-cost chains

Aggressive low-cost operators and political uncertainty are putting pressure on London-based fitness chain, Soho Gyms, but its new site at Tower Hill – acquired from Fitness First - is trading well.

In its latest filing to Companies House, Soho Gym's parent company, Ovalhouse Ltd, reported that turnover dipped a little to £7.9m (US$10.4m, €8.8m) in 2016, down from £8.2m (US$10.8m, €9.1m) the previous year – a fall of 3.7 per cent.

The filing said: “Budget operators (particularly Pure Gym and The Gym Group) are being aggressive with offers such as no joining fees, plus the introduction of group exercise.”

The report goes on to add “political uncertainty is not helping the consumer or staff recruitment” and that the burden of costs is increasing “in particular with rents, wages and business rates”.

Despite 2016 being a “difficult year at a few gyms, the business as a whole is still trading well,” the report said.

Soho Gyms now operates 10 studios but profits after tax dropped 24 per cent to £449,633 (US$590,991, €499,512) last year, from £589,760 (US$775,172, €655,184) in 2015.

Membership numbers were up 1.3 per cent but gym membership income was down 2.5 per cent.

Last year, the group introduced a lower price point at its Farringdon branch, which it said proved “very successful" due to the high population of workers and students in the area. A monthly membership at Farringdon costs £44.99 (US$59.1, €50), whereas at Camden it costs £69.99 (US$92, €77.8).

The group also acquired a Fitness First site in Tower Hill, which has undergone refurbishment, helping numbers rise from “a low 700 members, well into four figures”. Tower Hill uses a similar pricing structure to the Farringdon site.