ON THE right track

Leejam Sports Company, which operates a chain of fitness centers in Saudi Arabia, is in the right place at the right time to benefit from the openness promised by Vision 2030.

One of the top

How would you evaluate the company’s journey and the current positioning in the market?

Over the past 12 years, our company has evolved from Leejam 1.0 and Leejam 2.0 to Leejam 3.0. Back in 2006, when the company was formed, the owners began with opening fitness centers. This caught on rapidly, and Saudis began to include fitness as part of their lifestyle, bringing growth opportunities for the company. That was Leejam 1.0. However, as the business grew, the founders decided to take the company public. In 2013, they were advised to have a private equity partner on board to help lead the company through its next phase of growth—Leejam 2.0. At that time, we had three missions: corporate transformation, investment in senior management for business continuity, and a successful IPO. Around 75%+ of the current management was hired during this phase. Leejam went through its IPO in September 2018. It was in fact the most successful IPO in the GCC in the past couple of years, with a stock price that has increased 78% since IPO. Today, Leejam is worth well over USD1 billion and has around 4,000 employees.

What are some of the trends in the market following the increased attention on sports under Vision 2030?

Two things happened in Saudi Arabia, and we could not have been in a better place at a better time for our fitness business. The first major development was more opportunities for women and the approval of female gyms in Saudi Arabia. With that, the market grew overnight by 50% in 2017. Since then, we have opened 29 female fitness centers in Saudi Arabia. By the end of 2019, we will have 40 female centers, making us the largest player in this category today. Also, in 2018, we took over the Princess Noura University Fitness Center, the largest female fitness center in the world. The second major development was the Quality of Life program under Vision 2030, with great attention paid to encouraging healthy lifestyles. We work in close coordination with the government on how gyms should be operated, with male and female sections.

Leejam has a growing corporate wellness initiative with over 350 corporate clients/companies across the Kingdom. In some cases, we run fitness facilities exclusively for companies in their office location. We have a B2B concept, where companies buy corporate memberships at a discount for their employees as part of their employment benefits, and a B2C concept, where employees get discounts when they purchase memberships at the Fitness Time locations. Both B2B and B2C partnerships are a win-win situation for corporate clients—they not only improve employee benefits at a discounted rate, but also reduce medical insurance costs and sick days with healthier employees.

What are your thoughts on future expansion, both within the Kingdom and in the GCC region?

We already have a presence in the UAE with locations in four of the Emirates. There is also strong interest from Kuwait and Oman. However, when the female opportunity in the Kingdom opened up, we did not want to miss it. We have not opened up other locations in the GCC yet. In the next four to five years, we will continue to add 15 or more centers each year across all categories, focusing on our existing geographic footprint, which is Saudi Arabia and UAE, as well as expanding in the GCC. ✖

“Our mission is to steer society toward a healthy lifestyle and encourage people to exercise daily.”

In 2016, Saudi Arabia introduced the General Entertainment Authority (GEA), which has done fantastic things. It has put Saudi Arabia on the map as a serious contender when it comes to international entertainment. At the same time, it has done it respectfully and has not gone too far over the line too quickly. It has been a gradual process. Thus far, there have been events like Formula E racing, with live acts like The Black Eyed Peas and David Guetta. AEG identified a significant gap in the market, as most international events were brought in together with the entire supply chain. During the buying process, we were not necessarily getting the best service that should be delivered to the people of Saudi Arabia. Next, we decided to bring in companies to form an entertainment group to assume full control over costs and, more importantly, quality. We strive to provide the best experience for ticket price.

MARK SATCHELL

For us, it is not just about making money, but rather about having an actual social impact and taking the opportunity to improve lives— that is what we want to be our legacy. There are many new companies in the entertainment sector, though we are truly local. We have 10-15 years of experience. We understand it is not just about the show, but also about the entire supply chain, including construction, manpower, crew, audio/visual, and food and beverage. We believe in importing expertise rather than re-inventing the wheel.

RIYADH AL ZAMIL What are your upcoming plans to create shows and events with a strong local presence?

we have the Saudi Orchestra performing ‘Sixties until Now,’ a musical with all sorts of dances and music since the 1960s. There is a conductor, several actors, as well as a narrator who brings the story together. Now, Kuwait, Dubai, and New York are asking for it. It will be the first local Saudi orchestra to go international.

How do you create and organize your own shows and events in Saudi Arabia?

The important thing to remember with creativity is to never squash it, as restraining creativity is a silly idea. At AEG, anyone can come to us with an idea. Sometimes, the most bizarre ideas turn into the most beautiful products and shows. That said, we are not interested in creating pure entertainment, as we would like to create something with a message and social relevance.

MS

When it comes to the supply chain, we have built up an ecosystem of sister companies to support any new initiatives. AEG is part of RAZ Group, which is essentially an empowerment company with around 90 entrepreneurs who founded and developed their company under our holding. We aim for synergies and provide mentorship and consultation where necessary. When they are up to speed, entrepreneurs can become sub-contractors, or we can partner in another way. Generally, we do not believe in competition in our sector; rather, we find ways to collaborate.

RAZ

In terms of international content, there are some extremely famous brands that will come to Saudi, hopefully by the end of 2019. We also have a strong focus on creating more content locally that will eventually get to the outside world. The orchestra is a great example of that content, which we aim to take to the Association of Performing Arts Professionals in New York City in January 2020. If we go next year, I believe it will be the first-ever Saudi show outside the Kingdom. ✖

MS