Budget gym operator Pure Gym has acquired one of the fitness industry’s best-known high street brands, LA fitness, as it flexes its low-cost ethos in the face of costlier rivals.
Pure Gym said the sites used by its mid-market competitor would be given a no-frills makeover, which means commandeering back office space and closing pools and saunas to fit in more machines and members.
Commentators have described the takeover as illustrative of a split in the UK fitness market between low-cost clubs such as Pure Gym, which charge memberships by the month, and high-end gyms with annual contracts and specialist training.
The purchase brings the number of gyms under the Pure Gym umbrella to 141 with a further 16 expected to open this year. LA fitness launched in the early 1990s and was one of the fitness industry’s founding gym brands. Founded in 2009, Pure Gym is majority owned by the US private equity firm CCMP Capital.
Until the Competition and Markets Authority (CMA) approves Pure Gym’s plans, the businesses will operate separately. If the regulator decides that some of the LA fitness gyms cannot be changed to Pure Gym clubs for competition reasons, it is likely they will be sold on.
Pure Gym’s chief executive, Humphrey Cobbold, said the model of monthly rolling memberships or paying for one-off visits will be put in place in the revamped LA fitness sites, getting rid of the 12- and 18-month contracts which had been typical up to now. Cobbold was appointed chief executive of the gym chain in January after joining from cycling retailer Wiggle. A fitness enthusiast, he hails from the Cobbold brewing family from Suffolk which in previous generations produced a governor of the Bank of England.
When an LA fitness gym is closed for its makeover, the members will be informed and will not be charged while the site is shut. When the gym reopens, their membership will be restarted on the monthly contract model, unless the member asks to leave.
“If they say ‘I don’t want to be a part of that gym’ then we will say ‘OK we will not take any money from you’,” Cobbold said. The small number of customers who have paid their subscriptions upfront will be reimbursed.
When clubs have changed over to the Pure Gyms brand in the past, Cobbold said, typically more than half of the members transfer. Monthly Pure Gym membership costs range between £9.99 to £26.99, although the prices may increase for some central London clubs, Cobbold added, with typical LA fitness contracts costing between £30 and £65 a month.
The arrival of budget gym operators in recent years has put pressure on clubs in the mid- and high end of the market. Newcastle United owner Mike Ashley has also joined the fray with a commitment to open a chain of Sports Direct gyms, the first of which is in Aintree.
Ray Algar, a fitness industry analyst, said he expects low-cost gyms to continue building momentum but also for there to be a rise in the number of people attending specialist “boutique-style” studios, where experts run classes.
“I see the UK health and fitness market bifurcating or forking along two distinct pathways – self-service and supported. Many consumers have steadily been taking control of activities once outsourced to others – self-scanning our groceries, booking hotels and flight tickets – and enjoy the empowering feeling of serving ourselves,” he said.
“Low-cost gyms have tapped this phenomenon very effectively, attracting members seeking a narrow – machine-based – fitness experience and content to serve themselves. However, perhaps less conspicuous is the second pathway, which I describe as supported, where customers seek and pay for a more guided experience. This is where the very best specialist studios are to be found purposely engaged in helping customers reach a desired health and wellbeing aspiration.”
