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Nadim Meer in Health Club Management magazine on the boutique fitness investment landscape

Posted on 16 July 2020

Head of Private Equity, Nadim Meer has written a piece for Health Club Management magazine discussing how boutique fitness operators can best position themselves for investment in the post-COVID-19 landscape and how equity funding could drive some of the much-predicted consolidation in the boutique sector.

Nadim says: "As lockdown restrictions begin to lift, fitness businesses are focusing on navigating the new (socially distanced) landscape and getting a better idea of the impact the pandemic is having on their business model and longer-term financing requirements.

"History suggests that following a crisis there is a flight of capital towards private companies. If you add to this the fact that pre-COVID there were many private equity funds sitting on significant amounts of uninvested capital and that – historically – their best returns have been made when investing in the aftermath of a crisis, many private equity investors will be keen to return to the market and deploy capital as soon as possible.

"The logic of bringing a number of boutique brands under one platform, offering best-in-class activity to the same customers, as well as avoiding the margin erosion of ClassPass, may be unstoppable.

"Boutiques that emerge from the crisis will find that a strong brand, a compelling online presence, customer loyalty, a robust financial model and a strong management team will all make them attractive to investors, as platforms from which competitors are acquired and roll-outs are executed. The challenge for boutiques is to be the ones that drive the consolidation – rather than being subsumed by it."

Read the full article here.

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