1. GymNation had a busy year, opening 10 new gyms and doubling the number of sites. How have we been able to achieve growth so quickly?
Our growth potential began to accelerate approximately one year ago when we completed a management buyout of our previous investor, JD Sports, a UK-based FTSE 100 company. Once freed from all corporate interference and in full control of the business and its broader strategic direction, the company began to move in earnest towards expansion, with a particular focus on entering the Saudi market.
Opening 10 gyms in quick succession, including six in Saudi Arabia, has always posed challenges to our business infrastructure, but we have spent months carefully planning and Foresight led to flawless execution with all gyms opening within budget. As planned, we have almost doubled the number of members we had originally planned.
The Company is investing $20 million in the acquisition of existing Motor City Gym real estate, as well as $15 million in these new sites, to secure the long-term future of this site and provide significant expansion opportunities. We have invested more than 20% in capital investment. The acquisition of Fitness First space on top of the existing site connects the two spaces, nearly doubling the size of the gym and creating one of the most advanced and well-invested fitness facilities in the world. You can.
2. You mentioned that six of those new gyms are in Saudi Arabia. Tell us more about how the GymNation model is changing the fitness landscape and what impact you’re already seeing from your affordable and engaging approach.
The fitness scene in Saudi Arabia is booming and it’s a market we’ve been keen to enter for many years.
The government is focused on increasing the level of fitness adoption among the population and actively encourages Saudi citizens to engage in health, fitness and wellness. We want to do our part by breaking down affordability barriers and making fitness more accessible and welcoming to everyone across the Kingdom.
We have an active membership base of over 20,000 people in Saudi Arabia, 44% of whom have never had a gym membership before. Our model therefore acts as a disruptor to the status quo, and while we absorb existing market share, our role is to significantly grow the market, bring new demographics into the sector, and benefit society as a whole. We believe that this will also contribute to generating profits.
Interestingly, we also found that demand for women exceeds that of men in Saudi Arabia. The feedback we receive is that the women’s market is underserved and that prices at women’s-only gyms are often much higher than men’s-only gyms. GymNation has uniform pricing regardless of gender, and this will continue to be an important part of our service in Saudi.
3. How is the business situation in Saudi Arabia compared to the UAE? Please share any practical tips for other entrepreneurs considering expanding their business to KSA.
We have received many ‘health warnings’ about the challenges in replicating successful UAE business models and brands in Saudi Arabia. I remember being told at a conference that “Saudi Arabia is a graveyard for UAE companies.”
We do not accept this negative feedback, especially when these comments come from consultants with little or no practical experience of operating a business in Saudi Arabia or from operators who have made multiple attempts to manage their operations in Saudi Arabia. I took many of the negative and skeptical opinions with a grain of salt. From Dubai’s Palm Jumeirah!
Our experience was quite the opposite. Despite being a wholly UAE-owned company and without a local KSA partner, we have felt very welcome and support from the Saudi Arabian Ministry of Investment (MISA) has been a key element in this project. ensured a smooth and successful launch. An incredibly exciting market.
All I can say to everyone reading this is, don’t listen to the naysayers and be absolutely certain that Saudi Arabia is a completely business-friendly environment and welcomes foreign investment and new market entrants. I just want you to be confident. So, put your feet on the ground, invest in a Saudi-based team, and never look back.
4. A key pillar of Saudi Arabia’s Vision 2030 is to promote a healthier and more active society by making fitness accessible to all. And back home in the UAE, Sheikh Hamdan has championed a more active lifestyle for everyone through the Dubai Fitness Challenge. Can you tell us more about how GymNation contributes/supports these goals?
Initiatives led by the UAE and Saudi Arabian governments are a key driver of industry growth. The Middle East boasts the world’s fastest-growing fitness market, much of it driven by government-led initiatives such as Sheikh Hamdan’s annual 30×30 fitness challenge and Saudi Arabia’s Vision 2030 quality of life program. Thanks to you.
With a population of over 35 million people and a fitness penetration rate currently around 5-7%, the market opportunity in southern Saudi Arabia is significant, with the fitness market expected to double in the next 3-5 years. These are incredibly exciting times, and GymNation wants to be at the forefront of advancing these efforts as a regional “athletic partner.” We’re excited to continue championing healthy, active lifestyles and helping the communities we serve become better versions of themselves, whatever their fitness goals.
5. You have introduced innovative concepts like HYROX to the region. How does GymNation continue to be a pioneer in fitness trends and what new services can members expect in the near future?
While we are strategically focused on expanding our business through the opening of new locations, we plan to reinvest more than $3 million in a broader range of products in 2025. Case in point: we plan to open five HYROX Performance Centers in the coming months. These will be the first dedicated HYROX centers in the Middle East, providing hybrid athletes with the world’s best training facilities for this training method. We worked closely with HYROX to develop the world’s first HYROX365 Challenge, a benchmark workout event that combines elements of the HYROX race with elements of the HYROX365 training program.
The company plans to invest more than $1.5 million to roll out Pilates studios across existing and future gyms, with a fully comprehensive wellness and recovery offering scheduled to launch in Q1 2025. The company also recently announced a partnership with Olympic bronze medalist Tony Jeffries. already offers his Box ‘N Burn classes at many gyms.
6. So what’s next for GymNation? How big are your ambitions? Are you planning further expansion within the GCC and perhaps beyond the Middle East?
2024 is a very busy year and we have big ambitions for the next 12 months and beyond.
We are focused on growth and ensuring we reach our full potential in the region’s rapidly growing fitness industry. The company plans to open an additional 20 to 30 sites over the next 12 months, including entering new markets such as Kuwait, Bahrain and Qatar. One of our competitors, listed on the Saudi Stock Exchange, has a market capitalization of nearly $4 billion and is growing with more than 30 locations per year, demonstrating the high potential value in this sector. .
We also plan to continue investing in our AI and technology platforms. GymNation is already widely known as a leading leisure operator in implementing AI technology, but we want to take this to a new level. Our continued investment in technology, automation, and AI gives us a competitive edge by helping to reduce operational costs, streamlining processes, personalizing the member experience, and improving member retention. This distinguishes us from competitors who are still running outdated systems and outdated operational processes.
In the long term, we see an opportunity for GymNation to grow to over 100 gym locations across the GCC, while also exploring other opportunities across the MENA region. Additionally, we have been approached about entering markets outside the region, which represents further growth potential and highlights the value of our brand and business model on a global scale.
The GCC market is growing at 15-20% annually and we have invested in our internal infrastructure to grow at this pace and take advantage of what we see as generational opportunities. We will continue to do things differently and push the boundaries, especially when it comes to investing in people and leadership. Just last year, more than 15% of the company’s shares were transferred to senior members of the company’s broader management team. Having the leaders of our business with us as shareholders and their participation in the value creation as we grow creates an unbeatable culture and incentive structure that our competitors cannot duplicate. We are making some big new additions to our team that we plan to announce in the new year, but our success in executing our ambitious plans will depend on securing the right people, the right culture and the right incentives. We are fully aware of the consequences of doing so. We are committed to providing the best possible value in the industry.
