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Ceturtdiena 19.07.2018 | Name days: Jautrīte, Kamila, Digna

City Fitness to invest 400 000 lats in two new gyms

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, City Fitness Board Chairman Eriks Nadzins

City Fitness Board Chairman Eriks Nadzins

We plan to invest 400 000 lats in two new fitness clubs to be launched in Riga at the end of the year, City Fitness Board Chairman Eriks Nadzins told the business news portal BNN.

He also gives his own description of the average client of a gym in Latvia and points out this business requires huge investments, thus it is not possible to break even in a short period of time.

How many clubs does City Fitness have and how big is the staff?

Currently, we have five clubs with 60 employees, but we plan to open two more gyms by the end of the year. The premises are under construction and we already know they will be located in the shopping centres Domina and Sky&More. Moreover, the total investments hit 400 000 lats.

What impact did the crisis have on the company? Did you have to cut jobs?

It did, of course, hit also us. People subscribed less, yet we reacted quite rapidly by reducing the prices by 50% and changing the strategy completely. Similarly, we also optimized a lot of costs, changed suppliers and cut current expenditure on electricity, water, ect. We tried to economize in any ways we could. I must admit, though, when we started the optimization process, I had certain doubts, however, this reaction lead us through the crisis quite stable. We did not dismiss anyone, neither did we cut salaries. The position was categorical – to cut the costs without lay-offs and keep the quality.

What effect did the downfall in Latvia have on the fitness clubs sector in general?

It did have a negative impact. Many gyms were forced to shut down. Similarly, I also know a number of clubs in the regions of Latvia that went bankrupt, because clients simply did not come.

Can this business be regarded as profitable, what challenges do you face?

No, it is not. I’d rather say it is expensive as no less than 200 000 lats is necessary to open a club. People in Latvia are quite choosy. They want to pay little or nothing, but get the best quality. As soon as the price is up one lat to make some improvements, they dismiss the offer immediately.

Sports club business requires a clear vision of what you want, because it does not allow to break even in one or two years. At least two years are necessary to gather loyal clients. Moreover, the business demands meeting high standards of our own and those set by the state. In addition, one must also bear in mind clients activity is seasonal.

How fierce is the competition in Riga, how do you manage to maintain the market position?

We do not turn much attention to competitors. We develop and improve without considering the activities of others. What we do care for is clients and we try to meet their wishes. We have noticed the competitors copy us, not vice verse. Still, there is competition, of course, because there are not much people in Latvia that engage in sport. However, we realize only those who evolve can keep existing, so we try to introduce something new in every gym. This is how we strengthen our positions. The two new clubs will also surprise clients with innovative solutions.

How much has been invested to develop City Fitness?

200-300 000 lats is a sum necessary to launch a club. Standard interior and equipment alone require huge funds.

So, can we say 1 million lats has been invested in City Fitness over 12 years?

Exactly, the total investments really hit a million lats.

To what extent does location matter, does this have an impact on the turnover?

It’s a decisive factor. The gym must be easily reachable and with a parking lot. Most of people do not want to travel long from their homes or work places to reach a fitness club.

What impact do seasons have?

We split the year into seasons. The biggest number of clients is observed in September when the weather worsens and it gets more rainy. The numbers spike up to November when people start saving for Christmas presents. The next surge is in January up to June, which is the top season. Starting from June the number of clients drops down to even 30% a month. August is the worst of all – very few people come.

But what is positive here is that we can carry out some renovation, repair equipment and start preparing for the new season. Then, we launch a campaign in September and the numbers surge again.

Who goes to sports clubs more often: men or women?

There is 5% more women, maybe because there are more women in Latvia. However, most probably, this is due to the fact women come together with other women, while men mostly come alone.

How would you characterise the average client in Latvia?

It is about 50:50 between Latvian and Russian speaking people, most often aged 20-40. Often, in the mornings, there is an impression the clients do not work. Whereas, in the evenings, we see many well-paid people. But, still, it is not always so, because sometimes there is an impression those who make the most also save the most.

For the most part, people come three times a week and renew subscriptions regularly.

How sporty are Latvians?

In terms of gyms, unfortunately, it is about 1.5% of the total population. The biggest activity is in cities and it is near 0% in regions. To compare, the percentage hits 8% in Europe and 25% in Iceland. Speaking about Latvians in particular, I believe they should be more sporty.

What are City Fitness plans?

As I have already mentioned, we will open two new gyms in November or December. The space will be approximately the same as in other clubs, slightly more than 1 000 m2. However, we will surprise clients with equipment and activities they have not yet seen in Latvia. But I would not like to disclose this yet.

Do you also plan entering the regions of Latvia as well?

We were considering that before the downfall, but when the crisis stroke we abandoned the idea, neither do we plan to return to it in the nearest, say, five years.

 

 


Leave a reply

  1. Sports gal says:

    It is great new to hear there will be two more clubs. The one equipment I am crazy about to see in the clubs, is so called “Bodpod” – a machine that measures everything about a body, the percentage of fat, muscle and everything else in a body. Until now I have only had the opportunity to use this in Sweden, but I hope Latvia will hear about this some time soon!

    • viagra canada says:

      Might you personal message everybody with just about any ideas about the way in which chose to make this websites appear like this method , I’d thankyou!

  2. Jimmy says:

    There are many gyms in Riga, but this is one of the best ones.

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