Leading Operators – Fitness in Europe
edelhelfer report as of 31 December 2014
The new edelhelfer report "Leading Operators – Fitness in Europe" presents the current situation of the major fitness operators in Europe. Together, the top ten companies by members already comprise about 5.8 million customers, representing an increase of 400,000 customers compared to the previous year. Leading operator is again Germany-based low-cost provider McFIT. Also in 2014, the growth of the leading fitness chains was driven by a number of mergers and acquisitions.
The advisory boutique edelhelfer has analysed the main developments of the major health and fitness club operators in Europe: In total, the ten leading companies by members had over 5.8 million customers. Compared to the previous year, this represents an increase of 7.4 percent or 400,000 customers. “At the end of 2013, operators needed at least 300,000 members to be part of the top 10. Only one year later, they already needed almost 400,000 customers”, Niels Gronau, fitness market expert and managing director of edelhelfer, commented the development of the leading operators.
The set of operators within the top 10 was relatively stable; low-cost franchisor clever fit is the only new entrant. Thereby, already seven of the leading players are at least partially operating in the budget segment. With regard to the geographical origin, a dominance of the UK-based operators becomes apparent, who have four players in the top 10. The only other countries which are origin of more than one top 10 operator are the Netherlands (two) and Germany (two).
Graph: edelhelfer top 10 health and fitness operators by members in Europe
McFIT is again the leading fitness company with respect to members. Currently, more than 1.2 million people exercise in the facilities of the budget provider in Germany, Austria, Poland, Spain, and Italy. Thereof, its home market Germany with 166 clubs is by far the strongest region. However, an important step regarding the international expansion was achieved on the Italian market: In 2014, McFit became the segment leader also in the Italian market after the acquisition of the Italian budget operator HappyFit with 14 facilities in Northern Italy.
Basic-Fit/HealthCity realised the strongest absolute increase in membership in 2014. One year after the entry of the private equity firm 3i, the second-ranked company by members reduced the gap to McFIT and had more than one million members for the first time at the end of the year.
Also the third rank has not changed compared to the previous year: Although Virgin Active sold a smaller number of clubs to its British competitor Nuffield Health in 2014, the operator was able to maintain its position in the top three. With respect to current press reports, the company, which is part of Richard Branson's Virgin Group, is preparing an IPO in Johannesburg. The deal shall evaluate Virgin Active at about EUR 2 billion (GBP 1.5 billion). With respect to revenues, Virgin Active is the leading operator in Europe. The company generated revenues of more than EUR 500 million in 2014.
The high number of acquisitions in 2014 and the first developments of the new year once again confirm the major trends of previous years. From 2005 to the end of 2014, at least 100 transactions that had health and fitness operators as their target were realised. First, the consolidation among the major health and fitness providers in the market continues. Second, the ongoing interest of financial investors in the fitness industry is obvious. One of the most recent examples is the participation of the private equity company AFINUM in the German high-end operator MeridianSpa in early 2015. Already in September 2014, AFINUM had acquired shares in the Swiss fitness chain Let's Go Fitness and entered the fitness market with this deal. "The health and fitness industry has grown significantly in the past and it is expected to continue its positive development. Within the market, individual companies also offer a great potential for expansion, both through the roll-out of new facilities and the acquisition of existing other providers", Niels Gronau explains the ongoing interest of investors in health and fitness.