Pure Gym vs The Gym Group
A former PureGym CFO breaks down how low-cost gyms select sites, manage lease economics, and defend against competition — arguing the model's 30% cash-on-cash returns are structurally durable despite persistent public-market skepticism.
8 cuentos
C 1PureGym's location algorithm and the 5,000-member threshold
How PureGym uses demographic data and 10-minute commute-radius analysis to select sites, and why each gym needs roughly 5,000 members from a 30,000–40,000 catchment to be viable.
In Practise — Articles7:302 news
C 2The LA Fitness acquisition: buying into central London
PureGym acquired distressed LA Fitness in 2015 to access prime London sites it couldn't secure organically, converting swimming pools into gym floors and adding 30 locations in one deal.
In Practise — Articles4:102 news
C 3Lease economics and the danger of rent indiscipline
Why cap-and-collar rent structures provide cost certainty for low-cost gyms, how post-COVID incentives shifted from capital contributions to rent-free periods, and how overpaying on rent destroys multi-site returns.
In Practise — Articles6:001 news
C 4Low-cost gym competition and the blocked Gym Group merger
The CMA blocked a PureGym-Gym Group merger in 2014; since then, Exercise4Less failed with oversized sites while smaller competitors stall at 10–20 locations, leaving the two chains as dominant players.
In Practise — Articles5:402 news
C 5Clustering, competition, and mature gym resilience
PureGym learned clustering from Basic-Fit's French expansion, and found that competitors opening nearby causes minimal member loss — as low-cost gym demand regenerates quickly in good locations.
In Practise — Articles9:401 news
C 6Market skepticism and the Planet Fitness non-threat
UK consumer-facing businesses trade at depressed multiples despite durable gym economics, and Planet Fitness is unlikely to enter the structurally different British market.
In Practise — Articles4:403 news
C 7Unit economics: £1.3M fit-out to 30% cash-on-cash returns
A typical low-cost gym costs £1.3M to fit out, generates £1.1M in revenue on 5,000 members, and targets a 30% return on capital employed with maintenance capex at roughly 3% of revenue.
In Practise — Articles5:101 news
C 8Why low-cost gyms beat the mid-market: the reinvestment advantage
Low-cost gyms' cheaper reinvestment cycle and broader customer base make them structurally superior to mid-market chains, yet public markets still value The Gym Group at roughly 5x EBITDA.
In Practise — Articles5:242 news