The Gym Group has paused its rapid expansion plans in order to retain cash as users and new members drop off amid the coronavirus crisis.
The budget gym chain said this morning that daily usage has started to decrease over the past two weeks, new joiner members are lower than expected and cancellation numbers are higher.
Requests to freeze memberships have also spiked as the public were warned to undertake social distancing measures to slow the spread of the disease, despite the fact that the company’s gyms remain open.
“Mitigating Covid-19 will require a period of slowdown in our expansion to preserve cash in order that we are well placed, when this period of uncertainty ends, to address the long-term growth opportunity for low cost gyms in the UK,” the company said in a statement.
Last year the company opened 20 new sites in the UK, boosting its membership numbers 9.7 per cent to 794,000 by the end of 2019.
Revenue for the year was £153.1m and profit before tax was £6.21m, the company said.
Chief executive Richard Darwin said: “Whilst 2019 was another successful year in which The Gym Group delivered substantial growth in members, revenue and profits, we are now focused on planning for the potential impact on our business of Covid-19.
“To date, we have seen a small impact on trading and all 179 of our gyms remain open. We go into a period of anticipated disruption with an established membership base, a cash generative business model and a strong balance sheet.
“As the scale of the outbreak escalates we have contingency plans in place. Our business has a significant reach with over 10 million member visits already this year and our focus is to be in a strong position when we emerge from the Covid-19 disruption to extend access to affordable fitness across the UK.”