GymNation to Accelerate Expansion Following the Opening of Its 20th Location "The GCC fitness market is growing at 15-20% a year, and we have invested in our company infrastructure to grow at pace and capitalize on what we feel is a generational opportunity to open 100 gyms across the region in the next 3-5 years."
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GymNation, positioned as "The People's Gym", is democratizing health and fitness, by making going to the gym more affordable and accessible for everyone across the Middle East. The Entrepreneur Middle East team sat down with its founder and CEO Loren Holland to learn more about the company's expansion plans across the MENA region and beyond.
Loren Holland, founder and CEO of GymNation. Image courtesy of GymNation.
GymNation has had a busy year opening 10 new gyms and doubling the number of sites. How have you managed to achieve such growth, so quickly?
Our growth potential started accelerating around a year ago when we completed the management buyout of our previous investors, JD Sports, a UK-based FTSE 100 company. Once we were free from all corporate interference and had full control over our business and the wider strategic direction, we really started to get moving on our expansion, especially focusing on our entry into the Saudi Arabia market.
Opening 10 gyms, including six in Saudi Arabia, in quick succession, was always going to challenge our business infrastructure, but we'd carefully planned for this over many months and that careful foresight has led to flawless execution with all gyms opening on budget, on time and at almost double the opening membership numbers we had originally planned.
We've invested over $15 million of capital expenditure into these new sites, alongside a $20 million investment into the acquisition of our existing Motor City gym real estate to secure the long-term future of this site and provide a significant expansion opportunity. Acquiring the Fitness First space above our existing site allows us to almost double the size of our gym by connecting the two spaces together to create one of the most advanced and well-invested fitness facilities in the world.
You mention that six of those new gyms are in Saudi Arabia. Tell us more about how the GymNation model is changing the fitness landscape there, and what impact are you already seeing from your affordable, and highly engaging approach?
The Saudi Arabia fitness scene is booming and it's a market that we've had an ambition to enter for a number of years.
The government has a huge focus on improving fitness penetration levels across the population and are actively encouraging the citizens of Saudi Arabia to engage in health, fitness, and wellness. We want to play our part by helping to break down the affordability barrier and make fitness more accessible and welcoming for everyone across the Kingdom.
We have an active membership base in Saudi in excess of 20,000, of which 44% have never previously owned a gym membership. So, whilst our model acts as a disruptor to the status quo and sees us absorb existing market share, we also see our role as helping to significantly grow the market and bring a new demographic into the sector, benefitting the society as a whole.
Interestingly, in KSA we have also seen the demand from the females outstrip males. The feedback we have received is that the female market is underserved and in many instances female-only gyms are priced far higher than their male-only equivalents. At GymNation we have uniform pricing regardless of gender and this will remain a key part of our offering in Saudi going forward.
How do you find doing business conditions in Saudi Arabia when compared to the UAE?
We received many 'health warnings' about the challenges of replicating a successful UAE business model and brand into Saudi Arabia. I recall one meeting where I was told "Saudi Arabia is the graveyard of UAE businesses"!
We took a lot of this negativity and skepticism with a pinch of salt, especially when these comments were from consultants with little, to no, practical experience of operating in Saudi Arabia, or by operators who all too often had attempted to manage their Saudi operations from Palm Jumeirah in Dubai!
Our experience has been the complete opposite. Despite being a wholly owned entity from the UAE, with no local KSA partner, we've felt very welcome and the support from the Ministry of Investment of Saudi Arabia (MISA) has been a vital component, ensuring our smooth and successful launch into this incredibly exciting market.
All I can say to anyone reading this is, don't listen to the naysayers and have absolute conviction that Saudi Arabia is an entirely business-friendly environment and welcoming of foreign investment and new market entrants. So, get yourself on the ground, invest in a Saudi based team, and don't look back.
A key pillar of Saudi Arabia's Vision 2030 is fostering a healthier, more active society by making fitness accessible to all. And locally, in the UAE, H.H. Sheikh Hamdan has championed a more active lifestyle for all through the Dubai Fitness Challenge. Could you elaborate on how GymNation is supporting and contributing to these goals?
The initiatives led by the UAE and KSA governments are significant drivers behind the growth of our industry. The Middle East boasts the fastest-growing fitness market in the world, much of which is thanks to government-led initiatives like Sheikh Hamdan's annual 30x30 fitness challenge, as well as Saudi Arabia's Vision 2030 Quality of Life Program.
With a population of over 35 million and fitness penetration currently at around 5-7%, the KSA market opportunity is huge, with projections suggesting the fitness market will double in the next three to five years. It's an incredibly exciting time, and GymNation wants to be at the forefront of driving these initiatives as the region's 'movement partner'. We are excited to continue championing healthy and active lifestyles and supporting the communities we serve to become better versions of themselves, no matter what their fitness goals.
You've introduced innovative concepts like HYROX to the region. How does GymNation continue to be a pioneer in fitness trends, and what new offerings can members expect in the near future?
While we have a strategic focus on expanding our business through opening new locations, in 2025 we plan to reinvest over $3 million back into our wider product. A good example is that in the next few months we will be opening five HYROX Performance Centers. These will be the first dedicated HYROX centers in the Middle East and provide hybrid athletes with some of the best training facilities in the world for this training method. We have worked closely with HYROX to develop the world's first HYROX365 Challenge, a benchmark workout event combining elements of a HYROX race with those of the HYROX365 training programs.
We plan to invest over $1.5 million into rolling out pilates studios across our existing and future gyms and we will have a fully comprehensive wellness and recovery offering launching in Q1 2025. We have also recently announced our partnership with Olympic bronze medalist Tony Jeffries, and we are already offering his Box 'N Burn classes across many of our gyms.
So, what next for GymNation, what is the scale of your ambitions and do you plan further expansion in the GCC and perhaps outside the Middle East?
Whilst 2024 has been super busy we have huge ambitions for the next 12 months and beyond.
We're focused on growth and ensuring we deliver on our full potential within the region's rapidly growing fitness industry. We plan to open a further 20–30 sites in the coming 12 months, including our entry into new markets like Kuwait, Bahrain and Qatar. One of our competitors, listed on the Saudi Stock Exchange, has a market cap close to $3 billion and is growing at 30+ sites a year, which demonstrates the value potential in the sector.
We also plan to continue our investment into AI and our technology platforms. GymNation is already widely recognized as the leading leisure operator in its adoption of AI technology, and we want to take things to another level. This ongoing investment into technology, automation and AI gives us a competitive edge by helping to cut operational costs, allowing us to streamline processes, personalize member experiences and improve member retention. This sets us apart from our competitors who are still running on antiquated systems and outdated operational processes.
Longer term, we see an opportunity for GymNation to grow to over 100 gym locations across the GCC, while also exploring other opportunities across the MENA region. Additionally, we have been approached about entering markets outside of the region, which presents further growth potential and underscores the value in our brand and business model on a global scale.
The GCC fitness market is growing at 15-20% a year and we have invested in our company infrastructure to grow at pace and capitalize on what we feel is a generational opportunity. We will continue to do things differently and push the boundaries, particularly when it comes to our people and investment into our leadership. Just last year over 15% of the company equity was transferred to senior members of our wider management team. Having the leaders of our business as shareholders alongside us and them sharing in the value creation as we grow, creates an unbeatable culture and an incentive structure our competitors simply can't replicate. We have several new big additions to the team which we will announce in the New Year, and we fully recognize the success in executing our ambitious plans will come from having the right people, the right culture and the right incentives, whilst never losing focus on our promise to provide the best possible value offering in the industry.
