Virgin Active says its South African clubs are showing good traction to restore membership after restrictions around capacity were lifted, in line with closing regulations in February 2022.
Since the easing of coronavirus restrictions and the removal of capacity restrictions in the first quarter of 2022, Virgin Active South Africa said its sales have recovered to levels similar to 2019 levels with active members growing from 497,000 at the end of December 2021 to 557,000 in May.
In announcing its financial results for the year ending March 2022, holding company Brait said on Tuesday (June 21) that participation and utilization levels for membership continue to improve and termination levels have decreased, compared to 2019 levels.
Virgin, which accounts for 44% of Brait’s total assets, has had a significant year in completing its restructuring and debt refinancing plan, raising 1.8 billion riyals of new capital in the group. She said a significant amount of work has been done in the past 24 months to maintain liquidity, restructure the business and raise additional capital to provide a solid platform for recovery and growth.
Earlier in June, Virgin Active South Africa appointed Jessica Spira as its new Managing Director, effective October 1, 2022.
“With Jessica as Managing Director and a strong team, Virgin Active South Africa will be able to tap into the rapidly growing health and fitness market, and will enable Virgin Active to deliver new and innovative consumer experiences in South Africa,” said Dean Kwarsky, CEO of Virgin Active globally. .
“We are seeing an increased demand for community exercise and a move away from online fitness in the era of the pandemic. Males have dominated leadership in the gym industry, so hiring Jessica will bring a fresh perspective.”
Virgin Active also recently announced that it has acquired The Real Foods Group’s nutrition assets including 204 Kauai stores for £28.6 million. This acquisition is subject to regulatory approvals.
Looking ahead, the group said it will focus spending on “rejuvenating business” and increasing membership participation over the next few years.
With locations in the UK, Australia, Thailand and Italy, Virgin has indicated strong growth in its membership base since the start of the calendar year across key regions, from 754,000 active members at the end of December 2021 to 847,000 currently active members – with a significant decrease in the number of members upon freeze.
The group said that while all gyms are now open, business continues to be affected by trends to work from home.
Bright said its book value of its Virgin Active investments at the reporting date was R8.28 billion (FY21: 7.97 million) and made up 44% of Brait’s total assets (FY21: 45%).
Virgin Active is targeting a significant expansion of its reach with its newest clubs in Italy and Asia Pacific. As for South Africa, she said that although their clubs have a strong market position, they require digital facilities, products and investments.
Virgin said it will expand its mostly digital brick and mortar offering, as well as invest in members’ experience in certain geographies, particularly in South Africa.
It will also implement a flexible pricing model, although details of this have yet to be disclosed. In a statement on Monday, Discovery Bank announced several new features being rolled out to its customers – including changes to Vitality Travel and a gym option with Virgin Active.
The group indicated a “phased and iterative implementation of flexible membership models” going forward.
To combat work-from-home trends, Virgin said it will design an online offering to complement the experience within the club and expand levels of access and participation. He referred to a “hybrid business” model with home workouts along with in-person group training sessions, health apps, delivery services, and virtual reality – all supported digitally.