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Ray Algar - Lowcost Gym Sector

ukactive
ukactive

This document provides an overview of the emergence of the low-cost gym sector. It discusses key aspects of low-cost gyms including operating 24 hours a day with minimal staff, using technology and websites, and offering memberships at 50% lower prices than traditional gyms. Low-cost gyms aim to make fitness affordable and accessible through simplicity, supporting infrastructure, and appealing to consumers who are changing their views on gym memberships and sporadic attendance.

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06/10/2010 A strategic look at the emergence of the low-cost gym sector FIA Seminar October 2010 Ray Algar My perspective neutral towards the sector www.oxygen-blog.blogspot.com MINIMUM OF 50% LOWER THAN SIMPLICITY SIMPLICITY INDUSTRY PRICE SUPPORTING SUPPORTING INFRA- INFRA- STRUCTURE AFFORDABILITY STRUCTURE AFFORDABILITY SCOPE TO HEAVY OPERATE 24 TECHNOLOGY HOURS AND WEB USE MY MARKET MARKET DEFINITION DRIVERS DRIVERS OF A LOW- COST GYM CONSUMER CONSUMER CONSUMERS ARE CONSUMERS ARE SENTIMENT SENTIMENT CHANGING CHANGING TOWARDS CLUBS TOWARDS CLUBS ABILITY TO OPERATE CLUB GYM-ONLY SPORADIC SPORADIC WITH A SINGLE PROPOSITION ATTENDANCE ATTENDANCE PERSON 1
06/10/2010 I Care Consumers now have considerable experience of low-cost services 2
06/10/2010 More of our shoppers are using us for their whole shop instead of top-up shopping Fly for the price Group MD Aldi UK & Ireland of a pair of jeans Spend a little, live a lot 14 13 Think of a sectoryou will find low-cost Look good, pay less 16 17 3
06/10/2010 300 million units annually by 2013 Quality up, cost down way down SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE 4
06/10/2010 5
06/10/2010 SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC I can join online no pushy ATTENDANCE sales staff to deal with! SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE 6
06/10/2010 SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE Word of mouth Word of mouth on steroids on steroids 40 7
06/10/2010 SIMPLICITY INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE Why am I paying Why am I paying for a club I 贈50 just to use What do low-cost gym occasionally use ? a treadmill? consumers say? 8
06/10/2010 I have never been to a gym that is 贈15 before. I It is almost free thought I would walk in and find a lot of broken equipment 54 9
06/10/2010 55 56 57 58 10
06/10/2010 McFit Financials 2007 Euros % turnover (millions) Turnover 86 Staff costs 3.4 3% EBITDA 28 32% Interest charge 0.1 - Net assets 34 Clubs 88 61 Perhaps the biggest threat we face is that someone from outside our sector, with a huge war chest of cash and proven customer-centric business model, will build 1,000 shiny new facilities, and offers budget-busting membership deals Fred Turok, Chairman, FIA (statement from 2007) 11
06/10/2010 Operational excellence Customer Product intimacy leadership budgetgymresearch.ning.com oxygen-blog.blogspot.com Google: Ray Algar 12

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Ray Algar - Lowcost Gym Sector

  • 1. 06/10/2010 A strategic look at the emergence of the low-cost gym sector FIA Seminar October 2010 Ray Algar My perspective neutral towards the sector www.oxygen-blog.blogspot.com MINIMUM OF 50% LOWER THAN SIMPLICITY SIMPLICITY INDUSTRY PRICE SUPPORTING SUPPORTING INFRA- INFRA- STRUCTURE AFFORDABILITY STRUCTURE AFFORDABILITY SCOPE TO HEAVY OPERATE 24 TECHNOLOGY HOURS AND WEB USE MY MARKET MARKET DEFINITION DRIVERS DRIVERS OF A LOW- COST GYM CONSUMER CONSUMER CONSUMERS ARE CONSUMERS ARE SENTIMENT SENTIMENT CHANGING CHANGING TOWARDS CLUBS TOWARDS CLUBS ABILITY TO OPERATE CLUB GYM-ONLY SPORADIC SPORADIC WITH A SINGLE PROPOSITION ATTENDANCE ATTENDANCE PERSON 1
  • 2. 06/10/2010 I Care Consumers now have considerable experience of low-cost services 2
  • 3. 06/10/2010 More of our shoppers are using us for their whole shop instead of top-up shopping Fly for the price Group MD Aldi UK & Ireland of a pair of jeans Spend a little, live a lot 14 13 Think of a sectoryou will find low-cost Look good, pay less 16 17 3
  • 4. 06/10/2010 300 million units annually by 2013 Quality up, cost down way down SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE 4
  • 6. 06/10/2010 SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC I can join online no pushy ATTENDANCE sales staff to deal with! SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE 6
  • 7. 06/10/2010 SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE Word of mouth Word of mouth on steroids on steroids 40 7
  • 8. 06/10/2010 SIMPLICITY INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE Why am I paying Why am I paying for a club I 贈50 just to use What do low-cost gym occasionally use ? a treadmill? consumers say? 8
  • 9. 06/10/2010 I have never been to a gym that is 贈15 before. I It is almost free thought I would walk in and find a lot of broken equipment 54 9
  • 10. 06/10/2010 55 56 57 58 10
  • 11. 06/10/2010 McFit Financials 2007 Euros % turnover (millions) Turnover 86 Staff costs 3.4 3% EBITDA 28 32% Interest charge 0.1 - Net assets 34 Clubs 88 61 Perhaps the biggest threat we face is that someone from outside our sector, with a huge war chest of cash and proven customer-centric business model, will build 1,000 shiny new facilities, and offers budget-busting membership deals Fred Turok, Chairman, FIA (statement from 2007) 11
  • 12. 06/10/2010 Operational excellence Customer Product intimacy leadership budgetgymresearch.ning.com oxygen-blog.blogspot.com Google: Ray Algar 12