Xercise4Less to accelerate roll-out after strong sales growth
BGF invests a further £7.6m
Xercise4Less, one of the UK’s leading budget gym chains, is planning to roll-out further gyms across the UK after posting an 83 percent increase in sales and securing a new round of funding from its equity partner, BGF (Business Growth Fund).
The Leeds-headquartered business grew total sales to £21.9m in the 12 months to July 2015, up from £12m in its previous financial year. As a result of its organic roll-out, Xercise4Less now operates 35 gyms and has an increasing national coverage with sites across the north of England, the Midlands, the South West, Scotland and Wales, and opened its first gym inside the M25 in August 2015, in Hounslow.
In the next phase of growth, founder and CEO Jon Wright and his management team plan to accelerate the roll-out of the chain, and expect to open a further 15 to 20 gyms across the UK in the next twelve months.
Founded in 2006 by ex-rugby player Jon Wright, Xercise4Less started as a single unit in Castleford, West Yorkshire, and now employs over 600 people. The business featured in the Sunday Times’ FastTrack 100 in 2014 and 2015.
The acceleration of the company’s growth strategy is being funded by BGF, which first invested in the business in August 2013 when it had nine gyms and revenues were around £6m. A new growth capital injection of £7.6m, in addition to further funding provided in 2014, takes BGF’s total investment to £19.7m. BGF, which is the UK’s most active provider of long-term growth equity capital to small and mid-sized private and AIM listed businesses, retains a minority stake in the Xercise4Less.
The budget gym sector has increased the size of the UK private fitness market by around nine percent since 2011, with one in 12 people owning a gym membership. Xercise4Less has more than 250,000 members and, compared to the industry average for budget gym chains, its members are twice as likely to keep their membership longer than 12 months.
Jon Wright, founder and CEO of Xercise4Less commented: “Our focus on customer service and choice, and our investment in state of the art equipment has helped us to attract a large membership base and pursue organic growth plans.
“We have a strong management team in place and a robust pipeline for new openings across the UK. With the new funding from BGF, we are in a strong, well-capitalised position to accelerate the roll-out.”
Richard Taylor, BGF, who sits on the board of Xercise4Less said: “Xercise4Less is an example of how an ambitious company can disrupt an established model. Jon and his team have understood the market and the opportunity available to them and have used our growth capital to build a business of scale.”
BGF has backed more than 100 UK small and mid-sized businesses since 2011 and continues to provide long-term growth capital from its investment pot of £2.5bn in exchange for minority, non-controlling stakes.