How has RSG Group fared during the pandemic?
The first lockdown saw all our studios closed from mid-March to early June 2020, affecting all our studio brands equally. All locations were then open until mid-October, before the second wave hit and we had to close the majority of our studios again.
In some countries and regions, we were allowed to partially open our studios, but requirements and restrictions changed regularly across all locations.
Overall, our company-owned gyms in the US – except California – were significantly less affected by studio closures than our gyms in Europe. Fortunately, our pan-European presence helped us significantly in this regard, as we were less affected in countries such as Spain, Switzerland and Turkey than, for example, in our core market of Germany.
As a result of the ordered closure of fitness centres, the whole sector has had to contend with a decline in membership numbers and sales; our industry has lost more than a third of its members worldwide. Looking specifically at the RSG Group, it’s currently difficult to predict how serious the impact of the second and third waves will be on our company’s balance sheets, but certainly the new contracts that usually balance out the usual fluctuation in members were not achievable during the pandemic.
Has COVID encouraged you to adjust your strategy?
A crisis always unleashes new forces and ideas.
With our McFIT brand, for example, we set up a fully functional ‘TV’ channel within five days in March last year. This was used to broadcast a 10-hour live stream from Mondays to Fridays – including workouts, entertainment, interviews with well-known personalities, food and expert advice – under the slogan ‘The Big Pump’. In this way, we continued to support and guide our members throughout their day.
We also made our Cyberobics fitness app – with its wide range of virtual workout content – available free of charge to everyone around the world during the first lockdown.
And since the beginning of 2021, we countered the ordered closure of our gyms in numerous countries with a temporary yet innovative outdoor concept. Even with the snow still falling in many places, and temperatures below freezing, starting in February we began offering our members in Germany individual training under the open sky with our McFit brand. We’ve also set up outdoor gyms for our members in Italy and at Venice Beach in the US – a total of 50 locations.
We placed a special focus on compliance with all applicable laws and drew up a comprehensive legal, safety and hygiene concept – the latter with the renowned infectologist and public health expert Dr Klaus-Dieter Zastrow – to take a responsible approach to the virus.
With our outdoor gyms, we wanted to motivate the fitness community to stand up for their right to fitness. Millions of people who work out in gyms wanted to do everything they could during the crisis to maintain and strengthen their physical and mental health and fitness. For them, for us and for the entire industry, fitness is elementary and systemically relevant. Health needs fitness!
How popular was online training during lockdown?
Digitalisation has been making its way into every conceivable area of life for years, including the fitness industry. People want to train flexibly and independently, but without guidance, it’s difficult for many to motivate themselves or to put together suitable exercises that are effective and fun. That’s where Cyberobics comes in: we’re convinced that a full workout without a gym is possible.
And digital solutions have become more important than ever thanks to the pandemic, with many unable to go to their gym during the months-long lockdowns. The fitness industry will need to invest even more in digital solutions moving forward, offering alternatives to only working out in a gym.
We recently built on our existing Cyberobics library by introducing Cyberobics Live, streaming around 150 live classes – 100 in German, 50 in English – into the app. This enables everyone to train flexibly in terms of time and space, while still experiencing a sense of community.
These daily Cyberobics Live classes will also be streamed in our physical studios in Germany, Austria and Switzerland, and in the future throughout Europe as well as the US.
You acquired Gold’s Gym during lockdown too. Tell us more
Yes, that’s right. On 13 July 2020, the RSG Group was selected as the winning bidder in a court-approved auction process for Gold’s Gym. With a purchase price of US$100m, we acquired the most iconic gym chain in the world, including all-encompassing trademark rights and Gold’s Gym assets.
I’ve been a franchisee in the food retail business for over 30 years, so I both understand the huge potential of the franchise model and have the utmost respect for it. We now have a chance to accelerate our long-standing thoughts and put them into practice in the fitness franchise world. The only deviation from my original idea of slowly approaching franchising in the fitness sector was that we dived in headfirst!
I’m conscious we’re following in big footsteps. Gold’s Gym had a major influence on the industry’s development and was a source of huge inspiration when I was setting up my first McFit studio in Würzburg, Germany, back in 1997. We’ve inherited a legacy for which I have great respect.
What’s the latest news from Gold’s Gym?
With this acquisition, the RSG Group secured ownership of 61 company-operated and more than 600 franchise-operated gyms, and I’m extremely proud that we’ve been able to let this brand live on and flourish under the umbrella of the RSG Group for almost a year now.
Our goal is to return to the core values of Gold’s Gym, while also striking a balance between preserving its roots and leaping into the modern age: strengthening the product, revitalising the brand and driving digitalisation.
We unveiled the new Gold’s Gym concept and strategy at a digital event on 26 April 2021, and on 4 June were finally able to open the RSG Group’s Gold’s Gym Campus Europe, in Berlin. This 55,000sq ft flagship site represents the modern redefinition of Gold’s Gym and the product concept at its very best, serving both as a lighthouse project with global appeal and as a proof of concept, meeting point and inspiration for new and existing franchise partners.
Where Gold’s Gym has always been associated with bodybuilding and heavy weights, our new extended concept embraces all facets of fitness training: functional, cardio and group fitness, all complemented by an excellent personal training concept. We’re also strengthening the product by standardising the global appearance of the studios, focusing on the best quality and variety of equipment and facilities.
One important aspect of the new strategy is our focus on sustainability: the new Gold’s Gym is the greenest gym in the world. It’s CO2 and climate neutral and received a Platinum LEED Certificate – an international standard that recognises particularly sustainable construction.
The gym’s cardio area features 10m-high trees that filter pollutants from the air and significantly improve the atmosphere. We’ve installed highly sustainable training floors made from recycled car tyres or cork. The combined heat and power plant runs on biogas; a solar ‘flower’ saves solar energy; wall tiles are made from recycled computer monitors; and in partnership with the Technical University of Berlin, we’ve developed a new technology that allows us to generate electricity from muscle power on 150 bicycle ergometers.
We’ve now opened another Gold’s Gym in Herne, Germany – it opened on 11 June – and have further new openings planned for Milan, Vienna, Munich and many more locations, as part of a comprehensive growth strategy.
Also in June, we launched our Gold’s Gym online store for fans of the brand across Europe. This brings the full Gold’s Gym experience to Europe, selling a wide range of premium nutrition through to sportswear and accessories.
Your John Reed brand has launched in the US
We’d already expanded our John Reed Fitness Music Club brand into several countries across Europe, and had long planned to enter the US market by opening a club in Los Angeles. We finally did so in March 2021, and it was an occasion I’d been looking forward to for a long time.
The US, and especially Los Angeles, is the cradle of fitness and the strongest market in the world. It’s also the most competitive – but then, John Reed is a very special and specific fitness experience for an audience that’s inspired by music, art, fitness and lifestyle.
At all our John Reed locations globally, we link the fitness environment inside the club to the vibe and ethos of the community around it, and the downtown Los Angeles club follows in these design footsteps.
Elements of the LA scene greet members as they enter – from art by up-and-coming SoCal graffiti artist Robert Vargas which adorns the walls, to expertly curated beats being spun by prominent local DJs such as Benjamin Walker.
We’ll continue to look for opportunities to grow the John Reed footprint in the US, however, while there are numerous locations that make sense at this point, we’ll take our time so as not to compromise the authenticity of the brand or the experience, just for the sake of growth. We know we have to find exactly the right locations.
You’ve also announced your first UK John Reed
Large cities play a strong role as centres of vibrant societies, as well as birthplaces of new music and art genres and so they’re a focus of our international planning.
It’s not just about the US, it’s about the world – just like our community – so this year, three more countries will join the John Reed family.
The first UK location will open on London’s Liverpool Street later this year. The club will occupy a 22,000sq ft site spread over two floors and will offer a mix of cosmopolitan design, live DJs and a range of workout options. Its mix of colours, forms and materials – merging fitness, music, art and design – will create the unique John Reed feeling.
We’re also entering the exciting markets of France and the Netherlands, with a John Reed having opened in Rotterdam on 8 July – the 10th international John Reed location outside of our core market of Germany – with other locations including Zurich and Istanbul to follow.
Spread across four floors, the Rotterdam club features a boxing ring, a huge functional area, personal training, cardio and free weight areas, and of course a studio for professional live classes and group workouts. There will also be a bistro, saunas and spa pools.
In France, we’ll open up three different concepts. One will be in the 16th arrondissement of Paris and will be exclusively for women. In addition to a large spa, the club will set new standards in design, with contemporary African art pieces. The second, a 37,000sq ft site in the So Ouest department store – located in Levallois-Perret, near Paris – will adopt the theme of the Asian lucky cat, including a lucky cat store, collaborations with artists to design individual lucky cats, and much more. The third location will be in Lyon and will be a regular John Reed Fitness Music Club. All three sites are currently under construction.
What’s the latest on The Mirai?
The Mirai is detaching itself from its originally planned physical location and is transferring its business model to the digital world; in times of crisis, the determined and courageous look into the future and it’s essential for us to sustainably drive our vision of getting more people moving.
We’ve created a digital infrastructure and developed a prototype that enables the AI-powered real-time analysis and evaluation of fitness, health and movement data. There’s gigantic potential for digitisation and innovation in our sector, and The Mirai will bring together the key players on a virtual platform.
Together with our partners, we’re rethinking research and development in the fitness industry for a healthier and better world.
What are your plans for the next year or two?
As the mantra goes: ‘After the rain comes the sunshine.’ Our nerves and patience have been put to the test in an extreme way during the second and third lockdowns, but since mid-June 2021, after a period in which most of our clubs were closed for more than seven months, all our company-owned sites around the globe are once again open.
Not everything is back to the way it was, but we’re noticing positive signals and are slowly achieving a ‘new normality’. The big challenge right now is to quickly make up for the loss of members during lockdown, getting back to the membership levels we had before the crisis.
At the same time, according to experts, we have to prepare for a permanent life with the virus. We’re very focused on ensuring our members feel safe during training, and will continue to comply with all regulations and specifications regarding infection control. The motto for all of us is: ‘safety first!’
What are the biggest opportunities for the sector?
The pandemic will certainly challenge some competitors in the fitness market and speed up the consolidation of the industry, but in every crisis, there is also opportunity.
The challenge for the entire industry will be that fitness studios will take on a new significance after the second and third waves of the pandemic. They will always exist, but they will no longer have the same unrestricted status as before.
In my opinion, there’s a parallel with dining out where, in most cases, it’s not just about eating. It’s about an experience and being around people. It will be similar with gyms, where the focus will increasingly be on the experience. That’s exactly why we launched the John Reed brand five years ago – a brand that’s fundamentally different from the norm in terms of its design, its live DJs and so on.
Virtual training and digital workouts are also experiencing a boom and will certainly retain the importance they gained in pandemic times. Individualisation, and digitisation in particular, will play an even greater role in the fitness industry over the coming years.
We all need to offer our members completely new solutions, so they can be even more flexible in their training in the future – any location, any time. It’s why we’ve been working in this area for years now, and it’s paying off.
In conclusion, we’re just beginning to see the end of the pandemic and at the RSG Group, we face the future with cautious confidence. I’m convinced that those who think and act in a visionary way can overcome the current crisis.