Virgin Active plans ‘gentle Africa journey’
VIRGIN Active, the gym group majority owned by Brait is targeting Ghana and Zambia for possible openings.
Ross Faragher-Thomas, MD of Virgin Active SA, said this week the rest of Africa offered significant strategic growth potential for the company.
Firms continue to make inroads into the continent’s fast-growing economies in the hope of cashing in on a burgeoning middle class whose rising disposable income and lifestyle changes are creating a need for services and goods.
“SA is our biggest market, but we believe we can replicate our success across the continent as long as we move with proper care and consideration for each specific market … it’s a gentle journey into Africa,” he said.
Last week, Virgin Active opened its first health club in Botswana. It has also begun construction on a club in Kenya that is due to open late next year.
The Gaborone gym is located at Airport Junction — the biggest mall in the country — and was the first for the group in Africa outside SA and Namibia. It has two clubs in Windhoek.
“We look at whether a country has an emerging middle class and an underprovision of health and fitness offerings. And also, if the country is stable and investor-friendly and (we would also look at) where other South African companies have ventured and have had success,” Mr Faragher-Thomas said.
Worldwide, Virgin Active operates more than 275 clubs in 10 countries and has more than 1.3-million adult members. The company operates 124 health clubs in SA through three different club formats — Classic Collection, LifeCentre and Virgin Active RED — through price points ranging from R179 a month to R1,750 a month.
The RED club format is a value or low-cost offering with fewer features than full-service gyms designed to attract people who want to join a gym, but are budget-constrained.
The domestic gym industry, which has long been dominated by Virgin Active and Planet Fitness, has become more competitive as a slew of competitors such as SWEAT 1000, Viva and Go Health entered the market during the past few years.
The Virgin Group acquired the ailing Health & Racquet Club chain in 2001, following a phone call from former president Nelson Mandela to Virgin Group founder Sir Richard Branson, which prompted his interest in building health clubs in SA.
“He called while I was in the bath in the countryside in England and told me to come to SA to save a chain of gyms that was going bust and 8,000 people were about to be out of work. Obviously, if Madiba calls, you take the next flight,” Sir Richard said in an interview.
Investment company Brait sealed the takeover of 80% of Virgin Active from private equity player CVC Capital Partners for about R12bn in April. Virgin Group retained a 20% stake.
According to Brait CEO John Gnodde, there were plans to open more premium Virgin Active clubs in London, Bangkok and Singapore. Last year, Virgin Active raked in £639m in revenue. SA, where it will open 15 new clubs, was its fastest growing market in the six months to September.