23 Nov 2021
Sophie Lawler: Total Fitness CVA was 'the right thing to do'
BY Tom Walker
Entering Total Fitness into a company voluntary arrangement (CVA) in March 2021 was the "right thing to do" to secure the future of the company, according to CEO, Sophie Lawler.
Speaking exclusively to HCM, Lawler said the CVA was a calculated move after the health club operator – which at the time had 17 sites in the north of England and Wales – lost more than a fifth of its members during pandemic lockdowns.
"We lost around 20 per cent of our members during lockdown, which is fairly typical when you look across the industry," Lawler said. "I don’t think we fared particularly badly during the crisis compared to other operators.
"However, we’re a smaller operation and even the large-scale operators are facing restructuring challenges.
"The CVA was a really strategic, responsible, sensible decision.
"While arrangements like ours can be viewed as ‘rescues’ – and there is an element of that, of course – a CVA is designed to protect an otherwise great business that’s otherwise good and sustainable and that has earned its place.
"We needed to restore the financial strength of the business on re-opening in a way that put it in the best possible position to recover well, quickly and sustainably, despite having fewer members.
"It was the right thing to do and we’re in a much better position as a result."
Lawler added that the CVA restructuring has also given Total Fitness "air cover" to keep reinvesting in the business.
This, in part, has allowed the operator – which now has 15 clubs – to make a slow but confident recovery.
"We’d reached 97,000 members before the pandemic," Lawler said.
"We have a way to go before we’re back to pre-COVID levels, but we’ve signed up 38,000 members since we re-opened and we’re well on the way. We’re aiming to recover our membership base to pre-COVID levels before March 2022 at the latest."
She added that the pandemic had also seen a shift in the "typical" Total Fitness member.
"Our new members are different from what we’ve seen before: 39 per cent were previously non-gym members, and 44 per cent are switchers," Lawler revealed.
"A significant number of these (48 per cent) have traded up from lower-cost services, such as budget gyms.
"Among those new to fitness, far more of them have come from lower-income groups than has been the case at Total Fitness historically. And they’re younger too: 37 per cent are aged under 34, where normally this age group accounts for 15–20 per cent of our joiners.
"New audiences are seemingly prepared to pay a middle-market premium because they desire variety and, importantly, space.
"In fact, we’ve been doing some research among new joiners and the key driver for joining is variety and quality, where historically it’s always been convenience and price.
"This is a monumental shift from what I’ve seen in the industry for the last 20 years and, if it proves to be permanent, is a real wake-up call."
• To read the full interview with Lawler, click here for HCM Issue 10/2021
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