PureGym considers IPO as fitness industry gets back in shape

PureGym, the UK’s largest gym chain, is eyeing up a possible a stock market listing as it looks to expand to meet the rebounding demand for fitness since the easing of coronavirus restrictions.

The company, which is owned by US private equity investors, has appointed investment bank advisers as it explores fundraising options to help fund the opening of new gyms and paying back some debt. That could include a listing as soon as this year.

The number of people paying for its gym memberships was 1.6 million on 15 August. That was 94% of the level hit in December 2019, compared with 81% of that level as recently as March.

Gyms were forced to close for large parts of the past 18 months in the UK and elsewhere to minimise public mixing.

However, the removal of most restrictions in the UK had led to a rapid bounce-back, PureGym said, despite the rise of home workouts during the various lockdowns. All 506 of its gyms across the UK, Denmark and Switzerland are operating with minimal restrictions.

Humphrey Cobbold, PureGym’s chief executive, said the company was losing £500,000 a day during the “shockingly challenging first quarter” of 2021 when gyms were closed. It lost £92m in the first six months of 2021, it said in an update to bondholders on Thursday.

“We believe this is a propitious time to expand particularly in the UK and Switzerland,” he said, saying that health “has become an even bigger individual priority for consumers” since the pandemic.

A presentation by the company also highlighted the travails of rivals that may struggle to expand to meet increased demand, and the disastrous period for retailers also meant rents at high street locations were lower.

PureGym is owned by Leonard Green & Partners, a Los Angeles-based private equity firm that bought it in 2017 in a deal that valued it at £600m. The purchase came after PureGym cancelled earlier plans to float on the London Stock Exchange in the months after the Brexit vote in 2016, citing weak investor demand.

The company has appointed investment banks Morgan Stanley and Barclays as lead advisers, with Royal Bank of Canada, Jefferies and Berenberg lined up as bookrunners, the Financial Times first reported.

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