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Pure Gym pumps iron as no-frills model powers profits

The Sir Chris Hoy-backed low-cost gym operator Pure Gym has booosted its membership by more than 100,000 as fitness enthusiasts continue to flock to operators that eschew long-term contracts.
The Leeds-based company said it had 927,000 members after a near 13pc rise in 2017 across its 192-strong gym estate.
Pure Gym and rivals such as The Gym, run by former England squash player John Treharne, have become increasingly dominant forces in the UK fitness market by enticing customers with low monthly charges and more flexible operating models, which mean customers do not have to sign 12-month contracts.
The attractiveness of the market has not escaped investors’ attention, with Los Angeles-based private equity house Leonard Green & Partners snapping up a majority stake in Pure Gym in a deal in November that valued it at ?600m.
The US buyer bought the stake from CCMP Capital, the UK-based buyout house that purchased 80pc of the company in 2013 from Peter Roberts, the British entrepreneur, and his co-investors who started the chain. The Olympic cyclist Sir Chris remains a shareholder and ambassador of the brand.
Pure Gym pumps iron as no-frills model powers profits

Gym customers don't like 12-month contracts

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PeopleImages
Leonard Green’s purchase of Pure Gym also allowed it to refinance its debt. It moved away from a bridging loan and revolving credit facility to senior secured notes, a type of loan that is backed by the borrower's assets.
The rise in members meant sales at Pure Gym’s parent company rose more than a quarter to ?198m in 2017 helping operating profits rocket to ?23.3m from ?2.7m in 2016. Pre-tax losses narrowed from ?27.8m in 2016 to ?14.5m in 2017.
The company opened 20 new sites in 2017 and rebranded the final two LA Fitness gyms it acquired as part of a 2015 deal when it bought its rival’s 43 sites for around ?70m.
Besides contract-free membership, the vast majority of Pure Gym’s sites are accessible 24 hours a day via a pin code system for its entrances, which it said had proven popular with students and shift workers.
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