Stories of Growth

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My biggest asset was naivety

Richard Hilton, founder of Gymbox
Retail, leisure and hospitality | London & South East
  • Introduction
  • Early days
  • Richard's motivation
  • The future

When I was at school, I hated being told what to do. That led me to start a business. If you’re not good at taking instruction, you’d better do it yourself or get to the top quickly.

What fell in my favour – this sounds counterintuitive – is that I wasn’t good academically. I didn’t go to a university. I went to Watford College for an advertising diploma. By virtue of that, a lot of doors were shut to me. I couldn’t have gone into the City, so I went into advertising because it didn’t require an academic background.

In 1990, I left London to live in New York. I joined a gym – I think it was called the New York Health and Racquet Club – but left after three months. Hated it. It was so sterile with white walls, poor music. This was in the early stage of fitness where they just stuck some gym equipment in a room and that was it.

Nobody wanted to finance my idea – which I understand now, having seen how difficult this industry is to operate in. But I found the needle in a haystack.

I left NYC in 1997, came back to London, and was looking for a gym that was similar to Crunch. But London was just like New York in 1990, miles behind the US. All the gym offerings were stale and sterile.

I was working in advertising at the time and thought, ‘How difficult could this be? Let me give it a go.’

Needle in a haystack

My biggest asset at the time was naivety. I had no idea of the barriers. I wanted to create a more British version of Crunch. That brand was very American and ‘in your face’, I wanted to tweak it and make it more understated, so I started from scratch instead of trying to franchise.

Nobody wanted to finance my idea – which I understand now, having seen how difficult this industry is to operate in. But I found the needle in a haystack. I had some people round to watch a football match at my flat. One of these guys read my business plan while I was getting the beers. Turned out his dad was a non-executive director of Fitness First. He called me the next day and said, ‘Hey, do you want to meet my dad?’

Through that connection, I met the CEO of Fitness First and they ended up becoming silent partners in Gymbox. I had an equity investment and that was the catalyst for getting it off the ground. It was my design, my branding, my class creation, but they gave me all the technical knowledge that would have taken me years to learn – how much water you need for the showers, forecasts for the electricity bills, all of that. It was the dream scenario.

New kids on the block

The first Gymbox was in Holborn – we opened that in 2003. It did phenomenally well from the get-go. London was crying out for something different. We went from zero to 3,000 members in the first year. We only had one gym but had more press written about us in that first year than the whole of the establishment had in that time. We were the new kids on the block.

In 2004, we did a management buyout and became independent. Then we went on an expansion journey, funded by private equity, who gave us the cash to open in St Martin’s Lane Hotel and in an old cinema, the Lumiere in Covent Garden.

Sometimes people ask me, what was the biggest moment in the history of Gymbox? The turning point was the financial crisis because, from a management team perspective, we were making money so easily from 2003 to 2008 that the disciplines and procedures in the business were awful.

When the financial crisis happened, membership tanked. We had to look at how to run the business properly. The structure and top personnel brought in during the financial crisis were the making of us. It didn’t feel like a blessing at the time, it was horrendous, but it was a blessing. We have a total of 12 gyms now.

Why Gymbox chose BGF

“I loved what BGF said about culture, and that they were less aggressive than private equity houses. They aren’t just about profit but care about the journey, and they can be in it for the short term or long term. I bought into that because my problem with private equity prior to BGF was that they are only in it for three years, and growing profit over the short term isn’t always compatible with growing a sustainable business over the long term. BGF weren’t about the cut and run.”

I did it to create something

I’m a control freak. It feels natural to me to do something on my own. The idea of reporting to people always terrified me. But I knew I didn’t want to be CEO forever. When BGF invested in the business in 2014, I said ‘I’ll chief exec this, but I want to step down in three years.’ They were really accepting of that.

I changed my title and moved from chief exec to founder. After we got another capital injection in 2016, Mark Diaper, who had worked with me for years, took over.

It was a great feeling selling the business. Not because I wanted to get rid of it but because I had secured my family’s future. I didn’t do this for money. If you are obsessed with money, there are easier ways to make it. I did it to create something. But having a pot of money meant we would never be out on the street.

I’m still on the board and go to the weekly meetings, but the transition gave the management team, who had been so loyal, the opportunity to step up. I love them all. We are friends and I want them to be successful.

Competitive socialising

When I sold the business, I thought I would never work again. I was tired from the journey. I took a year off and spent time with my four kids. To be able to drive them to football matches, watch them play, or take my daughter horse riding, has been amazing.

My eldest is now 14 – she was nine when I sold the business. My youngest was two when I sold. Back then, they only saw a grouchy guy for a few hours on the weekend.

When I was running Gymbox, I never felt like everything was going right and that’s my personality. I never sit comfortably and think, I’ve done it, good job.

The nagging doubt

When I was running Gymbox, I never felt like everything was going right and that’s my personality. I never sit comfortably and think, I’ve done it, good job. When one gym was open and successful it was immediately in my rear-view mirror, and I was thinking of the next one. I was always looking for the next pinnacle.

I put a lot into these things, which is why Gymbox was successful. Why am I doing this again? To prove the first time round wasn’t all luck. That’s the nagging doubt. Was it luck or was I good? I have to prove it to myself.

Over the last five years I have been at home and I’m in a nice rhythm with the family. Before that I missed every sports day, every kid’s play. I sacrificed everything with Gymbox and I won’t do that again.

I’m 50 now so I want to work smarter this time. When you’re 30 you have energy and enthusiasm, but I couldn’t prioritise. I thought every detail was important all the time. This time it feels more controlled because I’m more experienced.

I might not have the energy, but I know what I need to do and when.