My over-55s workout for David Lloyd
Health chain boss is cashing in on a later life boom...
EVEN though he’s working out in his suit and tie rather than his usual sports kit, Glenn Earlam is a living, breathing advert for the health club chain he heads. Gamely clutching weights and donning boxing gloves for photographs at David Lloyd Leisure’s Harbour Club in Kensington, West London, there’s no sign that just the day before he flew back from holiday in Indonesia and is struggling with jet lag...nor that he went on a 17km run as soon as he got home in preparation for the Great North Run half-marathon next weekend.
He’s also preparing to greet another wave of fitness enthusiasts – September is the second busiest month of the year for the gym industry as people try to get back into shape after the summer.
Earlam is expecting an extra 25,000 members this month at the 99-strong gym chain (the 100th David Lloyd Leisure in the UK will open in Bristol later this year).
But the chief executive admits it’s one thing getting new members and an entirely different game
keeping them, even at his company where its members tend to be suburban, middle-aged and middleclass – attracted by its large sites with swimming pools, gyms, tennis courts, fitness classes and cafes.
While the drop-out rate (known in the industry as attrition) at David Lloyd was 37 per cent when Earlam joined – compared to an industry average of 55 per cent – he has brought it down to 32 per cent and intends to reduce it further with what he calls ‘clubbiness’.
‘It’s a simple thing, but if you’re going to a group exercise class and you’re meeting friends there, then you’re more likely to turn up,’ he says. ‘You might then go for a coffee afterwards and the whole thing adds up to a sense of belonging which makes a massive difference to how long you stay a member.
‘People join with great intentions, but those who stay the longest are those who get the habit early on. People who do group exercise have an attrition rate of around 6 per cent, but for those who don’t, it’s 38 per cent. It’s all about the “clubbiness”.’
As well as providing social events such as book clubs and wine-tasting, members are given free personal training sessions when they join to promote good gym habits from the start, and lapsed members are offered perks such as tennis inductions. Do some people who have forgotten about their membership cancel when they get the reminder phone call?
‘Yes!’ says Earlam, who admits it ‘can be controversial commercially’, but adds: ‘It’s the right thing to do’. It’s a refreshing comment in the light of recent figures showing Britons waste £4billion a year on unused gym memberships.
While Earlam worked hard building up the business – ‘we had 450,000 members and we’ve now got 625,000, and we’ve more than doubled profitability’ – he also set about a ‘cultural transformation’. ‘We now run the clubs from a local level rather than making decisions centrally and we’ve been asking our members what they want, because members in Kensington and Chelsea want very different things to members in Dundee and Glasgow.’
Spotting an opportunity in the over-55s sector – following Government advice for older people to be more active – he found a potential stumbling block. Personal trainers, he says ‘tend to be young and male’ which may be intimidating, so Earlam has a target to have at least one over-55 personal trainer (PT) per club by 2021.
‘We want PTs to be able to relate to their core customer,’ he says. ‘People want people who are more like them. If they’re female they tend to like female trainers and if they’re older they tend to like older trainers.’
Much of the recent rise in national gym membership has been down to the rise of budget gyms and, perhaps surprisingly, Earlam is a fan.
‘Budget operators have really been driving total gym membership and target younger, urbanbased members,’ he says. ‘When those people get a bit older and move to the suburbs they’ve built up a fitness habit and at that point we’re often the only offering around. We don’t see the budget operators cannibalising the market but ultimately being good for us.’
Being aimed at an older demographic doesn’t mean David Lloyd is slacking on the intensive workouts though and it is working on expanding its range of own-brand high-intensity interval classes with names such as Blaze, Synergy and Rhythm, with many appealing to competitive gym-goers by means of large screens linked to heart rate monitors.
There’s also the ‘unstoppable rise’ of yoga and Pilates while other sports such as squash are taking a back seat, angering squash players who have seen their courts turned into Blaze studios. Earlam explains that it’s simple economics, saying that an average of 20 people per club play squash compared to around 570 who attend Blaze classes.
The chain – founded by former tennis pro David Lloyd in 1982 – was bought from Whitbread in 2013 by private equity outfit TDR Capital which has pumped more than £350 million into the company.
The latest accounts for 2018 show an annual turnover up 7 per cent to £287million and profits of £35.2million. The company is expanding into Europe with 15 clubs in Germany, Italy, Ireland, Spain and even one club in India.
The next big thing in the UK is the launch of its ‘destination spa retreats’ of which there are three so far – in Farnham, Surrey; Purley, South London; and Bracknell, Royal Berkshire. The company has identified 20 sites which will suit a spa and at £3million each, they’re not cheap.
Earlam expects the return on investment to be in higher membership fees – but existing members will not see an increase. ‘New members will have to spend quite a lot more to join,’ he says, with the top Platinum membership coming in at £165 a month. ‘The spas are as good quality as you’ll find in any five-star hotel.’
Perks include meditation classes, sound baths and advice on sleep and nutrition and it should also reduce that all-important attrition rate. Earlam is a convert, explaining: ‘My wife and I went to the spa in the Royal Berkshire club the other week. We meant to go in the gym but we went to the spa – and stayed there for two and a half hours.’
People who do group exercise are a lot less likely to give up membership