Health club chain Fitness First has announced it is undergoing a $40 million overhaul of its branding, member services and payment options as competition in the fitness industry ramps up.
The chain has brought Jane Fonda out to Australia to spruik its new look and has invested over $20 million over the last year, with a plan to spend another $20 million throughout 2014 in capital, training and products.
The move comes after an ownership change in 2012 saw Oaktree Capital Management take over operations.
Fitness First describes the shift as “more than a rebrand, it’s a 360-degree approach to change, across all aspects of the organisation, from the inside out”.
The overhaul occurs amid fierce competition in the fitness industry, which has seen a shift towards 24/7 franchise models. Customers are seeking flexible payment options and focusing on value for money, according to a survey in 2013 by gym membership and payments systems provider Ezypay.
Fitness First Australia finance director Brent Cubis told SmartCompany around 20 “non-core” locations were closed or sold over the past year, with the focus now on boosting the best performing clubs, in closer proximity to major cities.
“It has always been a good business, but it previously had too much debt…we now have more spare cash to invest…we are catching up on four to five years of lack of investment,” he says.
Among the developments, it will soon open a $7 million venue in Flinders Street, Melbourne. The business has around 78 clubs across Australia.
The 21-year-old company will change its long-held blue logo to red, and it has adopted the slogan ‘go further’.
Other changes include the implementation of a ‘Pay As You Go’ system, which allows people to buy packages of visits, from a minimum of five visits to maximum of 50 within an allocated period of time.
“People can decide what they want…we won’t be criticised for locking people into contracts,” Cubis says.
He says the chain is now enabling members, of which it has around 240,000 nationally, to get out of contracts with no notice period if they have attended the gym on average three times per week.
A new series of training programs for members, as well as investing in staff training and tailoring fitness programmes to each member’s ‘training personality’ are part of the change.
In view of competition from 24/7 franchise models, the club surveyed 16,000 of its members to ask if they wanted Fitness First to be open all day and night.
Cubis says members didn’t want this, but they did want longer opening hours on Sundays.
Other fitness chains creating competition for Fitness First include 24/7 franchise model Jetts Fitness, which cleared $78 million in revenue in 2011-12 – an 85.43% rise on the year before.
Anytime Fitness Australia is another, with co-founder Jacinta McDonell-Jimenez bringing the 24/7 franchise to Australia in 2008 from the US. In 2013 she told SmartCompanythe business had grown to 292 clubs across Australia. It was on track to have opened 350 gyms by the end of 2013. In the 2012-13 financial year it turned over $170 million.
A new player on the scene, KAYA Health Club, launched in Melbourne just over a year ago, with a focus on offering yoga and pilates. Co-founder Christian Ruggeri told SmartCompany the business turned over around $1 million in its first year, and a second venue was soon possible.
Consumers appear keen to splash cash on these fitness options, with IBISWorld forecasting Australians will spend $6.6 billion on the health and weight-loss industries in the 2013-14 financial year.
It expects boom businesses will be personal training, gym memberships, weight-loss products and weight-loss counselling services such as wellbeing and nutrition advice.
It forecasts spend on gym memberships in 2013-14 will be $858 million, increasing to over $1 billion in 2018-19.
IBISWorld also predicts personal training is set to build momentum, with the 2013-14 spend forecast at $390 million, rising to $501.3 million in 2018-19.
Melinda is a business writer and editor and helps companies to bring their brand stories to life through her small business, Oliver Content. Melinda was previously the content manager for KPMG Australia, an editor of SmartCompany, and spent many years as a journalist.
