Globalisation on pause? How scaleups can navigate today's uncertainty9:30 am - 10:30 am
Two’s Company: Jon Wright & Peter Boddy, Xercise4Less
Xercise4Less is a true challenger brand, one which has forced many of the more traditional gym chains to make significant changes to their business models to compete. The budget club concept addresses a consumer need while bringing innovation to the market – truly the sweet spot for any business.
JON WRIGHT – FOUNDER AND CEO, XERCISE4LESS
I used to play rugby for Harlequins, but when I was 22 I was injured, and so had to come out of the sport. The first job I was offered was selling gym memberships, and I’ve stayed in the industry ever since.
Xercise4Less was born out of another, less successful, company. I had another health club in 2006, which was based on the traditional model. We were dealt some pretty bum cards and it was a struggle. I wasn’t some visionary who came up with the idea of budget clubs and then succeeded – it came out of things not working at first and then trying something different. I saw the idea of a budget club in Hounslow in 2008. Once we got halfway through 2009, I realised that this wasn’t just a good business model, it was a great business model. We converted our Castleford site into the new budget model and that was immediately successful. When you’re struggling for a couple of years and all of a sudden it starts to work and you’re not paying salaries with your credit card, you feel relief.
We quickly expanded, but there were also frustrations because banks wouldn’t lend me any money, so I couldn’t progress as far as I wanted with opening new sites. Looking back, it was good because we spent those first three years really forming the model, experimenting a lot and learning a lot.
In August 2013 we had eight sites open but wanted to expand further. A few people were interested in investing but I was put off by private equity. Someone told me about Business Growth Fund and I quickly realised it was very different.
We let 17.5pc of the business go: 82.5pc of something very big is better than 100pc of something small. I must have met about five potential chairmen before I saw Peter. It was all new to me, but I was quite clear that I needed a person who would fit in with Xercise4Less’s culture. As soon as I met Peter I knew he was right – he’s energetic and we got on straight away. Peter is a good sounding board and that’s useful because a lot of situations I’m coming across I haven’t been in before.
Being a chief executive and founder, it can get a bit lonely sometimes. It is good to hear from Peter that “I’ve been there before”, and to understand his thoughts on situations.
Our plans for the future are ambitious: we want to have 100 clubs open by 2016, and we plan to expand into Europe, too. But we have a clear business strategy, and we are used to fast growth and change – this is just the sort of environment we like.
PETER BODDY – CHAIRMAN, XERCISE4LESS
Before I met Jon, I was really interested by what he was doing with his business. It was disruptive, new and fresh – and in the leisure sector that’s interesting. Then I was introduced to Jon through BGF. He’s very driven, very committed and I got on with him and liked his approach.
With a young, new business, everything’s possible. When I’m at the table with Jon and his senior team, everything’s “can do, will do, am doing”. There are new ideas flying around all the time. The business is growing very quickly and what Xercise4Less is doing in terms of size, its equipment, its approach to the customer and harnessing social media is all very exciting.
Jon is an excellent manager and a great leader. I thought I could help him because I’d managed a much larger chain, Fitness First, and although I wasn’t the owner in the same way Jon is, I had been on the inside of a big group and could provide insight when needed.
Jon is the driving force behind this business and I see myself as someone who he can talk to. A key role for me is liaising between Jon and BGF. I have to make sure that both parties understand what the other is thinking and between us we have all got the same goal. BGF is an excellent partner; it is a minority investor that behaves extremely well. The people there are very clear and they are very supportive, so it’s not really a big deal. I have learned from the experience.
Jon’s approaching business issues with a fresh set of eyes, and I’m taking a lot of what I’m learning with Jon over to other businesses where I am chairman. Equally, I’m bringing ideas from other businesses to Jon’s table. That’s a big part of my role, too, and it is great to be able to cross-fertilise good ideas.
We’re just about to break through 200,000 members, and the company has gone from scratching around for money to having people offer to lend money and being keen to be involved. I recently picked up a report on the health and fitness business in the UK and Jon’s business is recognised as one of the challenger brands, which is incredibly exciting.
There are so many things that have happened that I have taken enormous delight to be involved in. I can certainly see our achieving Jon’s aim of opening 100 clubs by 2016.
There will certainly be ups and downs, because no business doesn’t have those. There will be competitors, incorrect decisions – all these things are part of business – but I see no reason why we can’t succeed and take the business forward.
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