Almost out of the blue, the FitnessX brand has taken off in the Danish fitness club market to create a group of 22 large-scale clubs in less than three months.
That’s “almost” out of the blue because the investors behind the project are very familiar personalities in the Danish market, and it leans on the acquisition of former Fitness1 clubs.
FitnessX was launched in September by Per Lyngbak Nielsen, former chief executive of Fitness World – by far the leading player in the Danish market.
Another investor is Jens Refsing Andersen. Formerly at Fitness World, he became involved with Fitness 1, another Danish gym concept, which had 17 clubs at the end of last year.
Lyngbak Nielsen explained this week that the launch of FitnessX was accompanied with the transfer of all “original” Fitness1 clubs, but none of the nine clubs which Fitness1 bought from Sats earlier this year.
Targeting about 100 clubs in the next five years, the FitnessX project is financed entirely by the shareholders, said Lyngbak Nielsen. Finans reported a few weeks ago that Lyngbak Nielsen earned nearly DKK370 million (€49.7m) from the sale of his stakes in Fitness World and then OnePark, the parking company he ran after his first exit from the fitness market.
The sale of Fitness World came in 2015, when the founder Henrik Rossing sold most of his shares to FSN Capital. The enlarged group was taken over earlier this year by the Pure Gym Group.
With surfaces ranging from 1,200 to 2,800 square meters, the FitnessX concept is most suitable for residential areas in the largest Danish cities, said Lyngbak Nielsen. Memberships are sold at 199 Danish kroner (€26.7) per month, for access to spacious and well-equipped gyms, and group exercise. There’s only one price point, applying across all of the clubs.
The project could fill a gap in the Danish market for a stronger second operator. The second-largest in Denmark in club numbers is Loop Fitness, a franchise operator with over 120 smaller gyms offering circle training.
Lyngbak Nielsen says that he already unseated a market leader in Denmark. When he started at Fitness World, it was Fitness.dk that was driving the market, he said. But when he left in 2015, Fitness World had 152 clubs around Denmark, and a market share unrivalled in any other European market. Fitness.dk was purchased two years ago by the Sats group.
However, Lyngbak Nielsen says he has not set out to rival Fitness World. He has assembled a team of about 800 people around the project to create a progressive gym business. “It’s like the comparison between a Tesla and a Ford Mondeo. Both will get you from one point to another, but the approach of the two companies is not the same at all,” he said.
Lyngbak Nielsen declines to say exactly what sets the FitnessX approach apart, but he indicates that it leans on smart use of digital resources. He suggests that it’s shaped in part by direct investments and involvement of the shareholders.
The investor makes it clear that the tensions in the market due to club closures earlier this year have accelerated the launch of FitnessX. “The plan was to have just eight clubs at this stage,” he said. Some of the added gyms were snapped up because they became available at the “right price.”
DLA Piper, which advised FitnessX, writes that the transactions to build the brand involved six sellers, including Smiley Fitness, The Club-Fitness and Fitness1.
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