In 2018, North West health club Total Fitness experienced a decline in both revenue and earnings before interest, tax, depreciation and amortization (EBITDA).
However the company, which operates 17 health clubs across the North of England and Wales, has said its current 2019 figures show a reverse in decline, with membership up 10 per cent to more than 100,000 members.
Total Fitness said the business is also on track to double EBITDA, having grown from 拢1m in 2018 to 拢2.2m in 2019.
The company attributes its reversal in fortunes to the appointment of Sophie Lawler and Jasvir Sanghera as chief executive and chief financial officer, respectively, in June 2018.
Mr Sanghera told BusinessLive the pair were appointed because backer NorthEdge Capital knew there were some issues with the business at that point.
He said: 鈥淚 guess they were looking for firstly a leader, in Sophie, to actually redefine what the purpose was and then secondly someone like me who can say 鈥榬ight, I can support and actually put some controls back into the finances鈥 because it felt like they鈥檇 lost a certain amount of control and they hadn鈥檛 invested in the right things.鈥
鈥淭he previous management team had only been there six months and they didn鈥檛 have the right skill-set to deal with what NorthEdge were facing; a decline in member-base, issues with infrastructure and no real clear purpose.鈥
Mr Sanghera said the previous management had invested in, for example, lockers, changing rooms.
鈥淐hanging rooms don鈥檛 add new members so while great we鈥檒l inherit that, what we鈥檝e tried to do is actually invest in the gym floor.鈥
The fitness chain said a push on its core fitness 鈥榩roduct鈥 was at the heart of the company鈥檚 strategy, having used part of a 拢4.5m investment from NorthEdge in September 2018 to improve facilities.
More than 拢1m has been invested in the refurbishment of the Wilmslow gym, with an additional 拢500,000 investment made into its Altrincham site, which was used to expand the brand鈥檚 360 fitness offering.
Mr Sanghera said investing a 鈥減eople power鈥 has also helped the group achieve its corporate objectives as previously, while staff has the good intention and right skills, they lacked purpose.
He said: 鈥淲hat we鈥檝e been able to do is actually put that purpose back to them by articulating and embracing what the purpose of Total Fitness is, which is that we provide the widest possible range of gym facilities and nobody else in our market provides that, you鈥檇 have to go to a local authority gym. The original purpose of the business was to provide that at the lowest cost.
鈥淪taff were looking for that direction, we've given them the tools, we鈥檝e told them what we鈥檙e going to do and then fulfilled what we said we were going to do, so we鈥檝e not given them empty promises.
鈥淲e鈥檝e said it鈥檚 going to take time and I don鈥檛 think they really had that honesty before.鈥
Mr Sanghera said the company also focused heavily on staff retention.
He said: 鈥淲e looked at the number of employees that had been there less than a year and it was nearly 60 per cent, so we said that鈥檚 an area we need to work.
鈥淣ow we鈥檙e down to 43 per cent, so that鈥檚 the difference we have made in nearly 18 months.鈥
Looking forward, Mr Sanghera said there are 鈥渞eally exciting things鈥 in the pipeline.
鈥淥ur plans are to invest in the current sites.
鈥淲e鈥檝e got 100,000 members across 17 sites, that鈥檚 a lot of members, and Wilmslow on its own is 11,500.
鈥淔or now, we feel like long term there are more sites but we鈥檒l grow slowly and if we grow we won鈥檛 go mad, so for now we want to concentrate on the 17 we鈥檝e got.
鈥淭hey all contribute, which is amazing when you have 17 sites. If you think about retail, retail always has a bunch of stores that don鈥檛 make money.
鈥淲e want to do is invest in those, grow those, and then we will look at what happens in the future and further afield but we will grow slowly from the centre.鈥
