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Pure Gym buy-up of LA Fitness lifts revenues Pure Gym buy-up of LA Fitness lifts revenues
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No-frills fitness chain Pure Gym has seen revenues surge after snapping up rival LA Fitness and striking up partnerships with Olympian Sir Chris Hoy and The Great Run Company. Revenues at the no-frills fitness chain Pure Gym have surged after snapping up rival LA Fitness and striking up partnerships with Olympian Sir Chris Hoy and The Great Run Company.
The Leeds-based chain, Britain’s biggest gym operator with 150 outlets across the country, made revenues of £125m in 2015. Earnings before interest, tax, depreciation and amortisation climbed 46% to £28m.The Leeds-based chain, Britain’s biggest gym operator with 150 outlets across the country, made revenues of £125m in 2015. Earnings before interest, tax, depreciation and amortisation climbed 46% to £28m.
The strong figures will fuel speculation that the private equity-backed firm will push on with plans for a stock market flotation. According to reports, a float could value the business at about £500m and could come as early as June. The strong figures will fuel speculation that the private equity-backed firm will push on with plans for a stock market flotation. According to reports, a float could value Pure Gym at about £500m and could come as early as June.
Membership has grown to more than 780,000. Pure Gym, which charges an average membership fee of £16.99 a month, is half way through converting the 43 LA Fitness gyms, some of which have been sold, and expects to have 170 gyms by the end of the year. Pure Gym, whose cut-price approach echoes the low-cost airline model, charges an average membership fee of £16.99 a month. Membership has grown to more than 780,000.
The firm is halfway through converting the 43 LA Fitness gyms, some of which have been sold, and expects to boast 170 gyms by the end of the year.
The LA Fitness outlets, which Pure Gyms bought in May 2015 for about £70m, have given it a presence in London and the south-east.The LA Fitness outlets, which Pure Gyms bought in May 2015 for about £70m, have given it a presence in London and the south-east.
Humphrey Cobbold, its chief executive, said: “Pure Gym has had an exceptional year in which we have seen a significant increase in membership of all ages, reinforcing the demand for access to affordable, flexible and high-quality gyms across the country.”Humphrey Cobbold, its chief executive, said: “Pure Gym has had an exceptional year in which we have seen a significant increase in membership of all ages, reinforcing the demand for access to affordable, flexible and high-quality gyms across the country.”
Rival discount operator The Gym Group was listed on the stock market in November at £250m. The two companies ditched a planned merger two years ago over competition concerns. Rival discount operator The Gym Group was listed on the stock market in November valued at £250m. The two firms ditched a planned merger two years ago amid competition concerns.
Pure Gym’s results boosted rival Gym Group’s share price by 3% in low volume. Their cut-price approach echoes moves by low-cost carriers in the airline industry.
The company noted that a third of its members have never been a member of another gym, which it says is evidence of the widening appeal of its no-frills model.The company noted that a third of its members have never been a member of another gym, which it says is evidence of the widening appeal of its no-frills model.
Its membership fees start at £14.99 a month, rising to £34.99 in Canary Wharf in London, and members are not locked into long-term contracts. Fees include access to up to 80 fitness classes a week, and many of the gyms are open 24/7. Pure Gym membership fees start at £14.99 a month, rising to £34.99 in Canary Wharf in east London, with members not locked into long-term contracts. Fees include access to up to 80 fitness classes a week, with many of the gyms open 24/7.
But the chain does not have swimming pools, saunas or cafes, which have high fixed costs. It does not have any sales staff either – sign-up is online. However, the chain does not have swimming pools, saunas or cafes, which have high fixed costs. It does not have any sales staff either – you sign up online.
A spokesman said former LA Fitness members will have seen their monthly membership fees more than halve from £40-45. A Pure Gym spokesman said former LA Fitness members will have had their monthly membership fees more than halved from £40-45.
Hoy, Britain’s most successful Olympic athlete of all time, has become an investor in the business and helped develop Pure Ride, a spin class cycling exercise studio which opened in Moorgate in the City this year. Chris Hoy, Britain’s most successful Olympic athlete of all time, has become an investor in the business and helped develop Pure Ride, a spin class cycling exercise studio which opened in Moorgate in the City of London this year.
Pure Gym has also signed a three-year partnership with The Great Run Company, which will see it as a lead sponsor and provider of pop-up gyms at running events across the UK including the Great North Run, Great South Run and the Great Manchester Run. Pure Gym has also signed a three-year partnership with The Great Run Company, making it lead sponsor and provider of pop-up gyms at running events across the UK including the Great North Run, Great South Run and the Great Manchester Run.