Business Growth Fund backs low-cost gym chain with £5m investment
Backing of Xercise4Less will be used to open 100 new gyms across UK
Business Growth Fund (BGF), the independent investment company backed by five of the UK’s high street banks, has announced a £5m investment in Leeds-based gym chain Xercise4Less.
Founded in 2006 by Jon Wright, budget gym operator Xercise4Less has grown to around 80,000 members and a chain of nine gym sites across the North of England.
Its gyms are typically located in large out-of-town sites with floor sizes exceeding 30,000 square feet which the company says give it an advantage over traditional city centre budget gyms including additional floor space and free parking.
The company saw particularly accelerated growth in the last year, more than doubling its turnover to £7.5m and exceeding growth targets by 250% over a five-year period.
BGF’s backing will be used to support a five-year plan to open an additional 100 gyms across the whole of the UK which Xercise4Less says will create an additional 4,000 jobs.
The UK gym market was estimated to be worth around £4bn in 2012 and the company hopes to capitalise on a growing trend of low-cost gyms taking market share from established mid-market operators.
The deal marks the BGF Northern Team’s third investment in two months.
Richard Taylor of BGF said: “We are delighted to be working with Xercise4Less; it is an exciting brand with a very simple but attractive consumer offering. The company has established a unique model in a high growth sector and the management team, under Jon’s guidance, has demonstrated its expertise in rolling out new gyms over the past 18 months and consistently delivering a fantastic customer experience at the same time.
“We have no doubt that they will be capable of growing and managing the business on a much larger scale.”
Xercise4Less founder and chief executive Jon Wright added: “The Xercise4Less concept is growing because we believe that a budget gym shouldn’t offer a budget experience. Cost remains a major issue for many consumers today but we work hard to ensure our members benefit from many added value services.
“The facilities we offer and the price at which we offer them continue to attract a large tranche of new consumers into the market.”