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13 May 2024
Snap Fitness' holding company – Lift Brands – is up for sale
BY
Kath Hudson
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A re-energised Snap Fitness is seeking investment
photo: Lift Brands
Speaking to HCM, global CEO of Lift Brands, Ty Menzies, has confirmed that the company – owner of Snap Fitness and Fitness On Demand – is up for sale. Current owner, TZP, intended to back the business for five years before exiting, but the investment has been locked in for ten years, due to the pandemic.
Snap Fitness joins a raft of health club operators that are currently up for sale, after their private equity backers – who typically invest for three to five years – had their exits delayed by the pandemic.
VivaGym changed hands recently, David Lloyd Leisure has been looking for a sale at around £2 billion for 18 months, LifeFit brands in Germany is in the thick of a sale from Oaktree Capital and Barry’shas appointed a strategic advisor to look at its options, which is likely to include a sale, with the company looking for around US$700 million.
Menzies has been undertaking a brand repositioning, refreshing the strategy and management team and laying out expansion plans in preparation for the sale.
The opportunity is being marketed through Stifel in the US and EMEA, with support from Record Point in APAC and is expected to conclude in the next couple of months.
“We have a very clear plan, a strong management team and a few possible areas of acquisition, so it’s about finding an investor that wants to buy into this,” he says.
"There are ambitions to increase the number of units from 1,000 to 1,350 by 2028. The expansion will be predominantly in the US, Australia and UK, with additional growth in Ireland, elsewhere in Europe and APAC.
“We’ll focus on the 19 markets in which we currently operate and expect much of the growth to be organic with existing franchisees taking on additional units,” says Menzies. “We sold 77 licences last year, the most since 2012, and 70 per cent of these went to existing franchisees.”
Snap is reporting that it's exceeding pre-COVID figures, with membership and same-store sales up 15.5 per cent and system-wide sales up around 15 per cent on the year.
After a review by Yonder Consulting and consultation with franchisees, the new strategy is being rolled out with the clubs being refreshed, investment in the app and new in-club messaging, which focuses on how working out makes you feel, rather than look.
“Most people go to the gym to feel better and that’s far quicker to achieve than losing 5kg, so we decided to move away from talking about how fitness makes you look to how fitness makes you feel,” says Menzies.
The configuration of clubs has also changed to include more weights. “A lot of people are telling us they want to feel stronger, which is great,” says Menzies. “We’ve, therefore, reduced our cardio areas by 20–30 per cent and given that space over to strength, functional training and open floor space.”
He confirmed Snap is also considering installing wellness and recovery spaces if it can be done within the model of affordable convenience.
Menzies says he’s on the lookout for trends: “We’re interested in Pilates and there’s also space within the Lift Brands portfolio for a different type of gym – a big box concept, perhaps. Ideally we’re looking for complementary acquisitions, but we might also acquire similar businesses that could be converted to Snap Fitness.”
In addition to owning Snap Fitness and Fitness On Demand, Lift Brands has minority investments in both 9Round and Fitstop.
Read more about the strategy and future plans in HCM’s interview with Ty Menzies in the current issue here.
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