Pure Gym and Gym Group Merger expected to lead to Expansion

Posted on 13 February, 2014 by Kirsten Kennedy

This week, it was announced that budget chains Pure Gym and The Gym Group intend to merge their firms in order to widen their respective reaches and attempt to become dominant in the competitive low-cost market. Upon merging, the new body will control just over 100 commercial properties in locations throughout the UK.

Young woman weight training. Camera angle view.

Pure Gym was launched in 2009 and began with just four clubs, but has proven to be so popular that the owner, private equity group CCMP Capital Advisors, now controls 61 24-hour outlets throughout the UK. The Gym Group, owned in partnership by Phoenix Equity Partners and Bridges Venture, has 42 clubs at its disposal.

Although regulatory approval is yet to be granted, the chains’ respective chief executives are confident that permission will be granted for the merger to go ahead. The Gym Group’s chief executive, John Treharne, believes that the merger will create the opportunity to provide customers with better value for money and greater access to modern facilities.

He says; “Customers want total flexibility and value for money options when it comes to keeping fit.

“This enlarged business, combining great facilities and excellent trainers, will provide a compelling alternative to existing gym providers.”

Mr Treharne will retain his position as chief executive upon the merging of the companies, thereby giving him a large degree of control over the proposed expansion programme expected to be implemented within the year. Pure Gym chief executive Peter Roberts, meanwhile, will take on the role of executive chairman of the combined group. His first job could be to examine the possibility of listing the expanded company on the London Stock Exchange which analysts believe could work in the merger’s favour financially.

Mr Roberts hopes that the larger company will be able to persuade greater numbers of consumers to join gyms by opening new branches in areas which have as yet remained under the radar of the gyms sector.

He says; “This agreed deal unites two innovative players in the fast-changing gyms sector, where the low priced model is improving consumer choice and contributing to better exercise levels across the country.

“We expect our complementary brands and locations to encourage more people to join gyms.”

With “no frills” gyms and minimalist studio designs becoming more fashionable, it could well be that this merger is set to dominate the gyms sector in the coming years. However, with many rivals to take into consideration, the larger company will have to carefully consider ways in which to make its gyms stand out.




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