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Mishcon de Reya sees health and fitness industry attract increased investment - a trend set to continue

Posted on 06 November 2017

Mishcon de Reya sees health and fitness industry attract increased investment - a trend set to continue

The UK's health and fitness landscape is attracting significant investment interest. This trend is set to continue over the coming years as change in the sector continues at pace. Favourable demographic and sociological trends make investing in this space particularly appealing as people increasingly focus on their health and longevity.

The growth is primarily being driven by the private sector, which has more clubs, more members and a greater market value than ever before. There are now over 9.7 million fitness members in the UK: one in seven people in the UK is a member of a gym.

One of the big drivers of the growth has been the boom in fitness-focused technology. New products, such as fitness apps and wearable technology, have widened people's interest in fitness and have enhanced the consumer fitness experience, fostering greater engagement and increase in gym retention rates.

There is also an increasing lifestyle element to fitness – it's not just about the gym; it's also about the brand. This has created space for boutique gyms and fitness studios, often centred around classes, that allow the customer to choose how and when to get fit and healthy, with pay as you play pricing rather than rigid, twelve month, fixed-price membership fee structures.

In an ageing society where the NHS is being stretched to its limits by preventable lifestyle-related conditions such as heart disease and type-2 diabetes, the sector's growth prospects will be further enhanced by the need for practical health policies focused on prevention over cure. Investors have recognised these emerging trends and there has been significant interest and investment activity in this sector. 

Over recent years Mishcon de Reya has advised some of the most exciting and innovative players in the fitness and wellness industry, including:

  • Encore Capital's luxury gym group, The Third Space, which recently launched its class-based boutique fitness studio concept, Another Space, in Covent Garden;
  • Triyoga, which opened its fifth site in Shoreditch last month;
  • Boom Cycle, a growing chain of spin studios that has built a cult following;
  • GymBox, which recently secured a follow-on £13m investment from the Business Growth Fund; and
  • Soho Gyms.

Most recently, Mishcon de Reya advised Piper PE in respect of its investment in fashionable fitness studio, Frame. The Mishcon de Reya team was led by Private Equity Partner Nadim Meer, with assistance from Corporate Associate Sam Perkins.

Nadim Meer commented: "The fitness industry has been an area of focus for us over the last few years, driven by the increasing interest of investors looking for opportunities in the space and a core of entrepreneurs seeking to scale up their businesses. The passion of the likes of Pip Black and Joan Murphy, the founders of Frame, together with customers embracing and demanding more innovative, fun and flexible ways of working out creates a winning combination."  

Rory Gibbs, Investment Director at Piper, added: “Mishcon de Reya's expertise in the fitness sector, as well as their understanding of fast growth, entrepreneurial businesses, meant the firm was a natural choice to advise us on our investment in Frame. We've worked with the Mishcon team many times before and they have always delivered.