Network meets… PETE MANUEL
MANAGING DIRECTOR FITNESS FIRST AUSTRALIA

One of the biggest movers and shakers in the Australian fitness marketplace, Fitness First Australia plays a key role in the working life of many fitness professionals. As it undergoes restructuring, Network caught up with managing director Pete Manuel to find out what the future holds for this international chain club.

Can you tell us a little about your background?

I am proud to have been MD of Fitness First Australia since May 2011. Prior to joining Fitness First, I was vice president and managing director of Procter & Gamble Australia New Zealand, where I was responsible for all aspects of the P&G operations. I have enjoyed a great career with experience in the UK, US, Canada and Australia with global brand leaders – including Gillette, Duracell and Yoplait – in a number of demanding management, marketing and sales roles. I have also been a Fitness First member since 2006.

BUSINESS

The change of Fitness First ownership from BC partners to Oaktree will see 24 Fitness First clubs being sold and removed from the Fitness First chain of clubs. The reason given by Fitness First was that the clubs do not fit the profile for Fitness First Australia’s future. So, what does this profile look like?

The June announcement was part of a major restructuring of the global Fitness First group that will give us the necessary financial firepower to develop the brand and secure it as one of the leading health and fitness operators both in Australia and the rest of the world. All businesses review their portfolio from time to time and this was overdue for Fitness First. The opportunity to reorganise our portfolio afforded to us by the global restructure has meant that we can now focus on clubs that are better aligned to our vision of providing the ultimate gym experience to our members via valued clubs that match and compliment their lifestyles. Our focus will be firmly on delivering the best possible experience to our members.

Fitness First used to have the objective of ‘100 clubs by 2010’, which didn’t quite happen. What are your primary short and long-term objectives for Fitness First?

With $893 million of the group's debt effectively written off, and $163 million to invest back into the business internationally, we find ourselves in the best possible starting position to become fighting fit for the future. It is very important to me and to my management team that Fitness First delivers the best possible gym experience to our members. We are determined to create a member experience that delivers satisfaction, value and results. We’ve made our prices more affordable and our terms more flexible; we’ve introduced new classes and products and we will continue to innovate and deliver the experiences our members ask for.

The media is quick to jump on any negative stories about the fitness industry in general and Fitness First in particular. Do you plan to improve the perception of Fitness First by the media and the wider community?

There is no doubt some of the old perceptions are hard to shift. I strongly believe that actions speak louder than words and some of the changes we have introduced to the business, such as offering fully flexible memberships, online joining and a simplified leaving process, are helping deliver increased member satisfaction.


Fitness First Bond Street, Sydney

Does the change of ownership affect Fitness First Australia’s links to the UK and global operation?

Fitness First is a household name in 10 countries around the world. The restructuring of the global Fitness First group has seen us emerge largely debt free. We now have the means to invest in new sites and new equipment and we will upgrade the quality of existing clubs to ensure all our members globally feel comfortable and happy. The change of ownership of Fitness First will enable the recapitalisation of the global business and will ensure its long-term viability.

The debt burden that threatened the global business’s survival has been significantly reduced. Fitness First businesses around the world will be given substantial working capital that will be used to redevelop existing clubs and develop new ones. Fitness First will now have the strongest balance sheet in the global fitness industry.

This benefits Fitness First Australia as it reduces the impact on the group that the non-performing clubs in the UK were having. While the new ownership has not altered the relationship with the rest of the group, I do feel that Fitness First Australia is now in a very strong position to drive the global company forward. Fitness First Australia is opening four new clubs in 2012, the first of which was in Perth, WA on 21 June.

Has the growth of lower-cost, lower-service clubs affected Fitness First’s operations?

There is no doubt that the Australian fitness industry has changed in recent years – however, I think that we are able to offer our members something that the low cost providers cannot. We can offer more flexible terms and we constantly look at our pricing to ensure that it is competitive. We can offer a comfort guarantee, a free PT session for all new members, more experienced staff who have true career progression, a wide variety of group exercise classes in every club, access to the latest in machine technology and, probably most importantly, access to all our clubs across the country which provides true flexibility to our passport members.

How great an impact do you envisage the trickle-down effects of the carbon pricing scheme having on Fitness First clubs? Do you have plans to reduce clubs’ carbon footprints?

We are not seeing any effect from carbon pricing yet, but as a business we are always at the mercy of landlords and suppliers and we cannot guarantee that they will not pass costs on to us. It is important for every business to take steps to reduce its impact on the planet, and Fitness First is no different. We work hard to make sure that we are fit for the long term future by utilising water saving shower heads, setting up clubs with systems that reduce electricity usage and looking for future landlords with builds that are Green Star rated.

"All businesses review their portfolio from time to time and this was overdue for Fitness First... we can now focus on clubs that are better aligned to our vision of providing the ultimate gym experience."

STAFFING

How have recent staff changes at management level affected the direction of the company?

Our Fitness First predecessors achieved a great deal that I thank them for, and our role now is to take the business forward. These are now different times for the fitness industry. Post Global Financial Crisis there was an influx of new competition and the rise of the ultra-savvy consumer. What originally made us successful needs to evolve, which is why we are taking Fitness First to the next level.

Do you subscribe to the theory that a business cannot be truly successful unless its staff are happy to come to work?

None of our worldwide success would be possible without our fantastic staff. Our gym and fitness instructors, personal trainers and management are our single biggest asset. We’ve created a business that supports its employees, develops skills and talents and rewards outstanding performance. At Fitness First we live by a set of values we call RECIPE which puts respect, everyone counting, community, innovation, performance and energy at the heart of all we do, and we reward employees who consistently demonstrate these values. In fact, this year some of our national level RECIPE winners got to attend the London 2012 Olympic Games. Our employees also have club memberships to help them bring balance and wellbeing into their lives – and at Fitness First HQ we provide lunchtime cycle classes for those in more sedentary roles!

Fitness First was a pioneer of the contractor model for personal trainers. Is this the strongest way forward for Fitness First, or would a blended model, as some other clubs use, be an option?

The Franchised Personal Training model has allowed numerous personal trainers in Australia to build their careers and client bases within our clubs. This model gives personal trainers unlimited earning potential and the longevity of the model is evident in the tenure of some of our most successful trainers, some of whom have been with us for over 10 years. The retention of a Fitness First personal trainer continues to remain better than current industry levels, which allows us to attract and retain the best quality trainers in the industry. We currently have Floor Instructors in all our clubs and through evolving our member experience to be more fit-centric, Fitness First is reviewing a number of PT model options that will provide both the best career path for a new PT to the fitness industry, balanced with the best possible fitness service for our members.

Are there any skill areas in which newly qualified trainers who start with Fitness First are lacking that you would like to see addressed by Registered Training Organisations?

Industry experience has only recently been reviewed and addressed by the majority of RTOs, and I believe this will make a difference to up-and-coming personal trainers. Externally the life of a trainer can look glamorous and exciting, getting paid to spend time in a gym seems like a simple and fun occupation. However, because most trainers work when people have down time, this can restrict social time, and for every hour that a trainer works face-to-face with a client there is also behind-the-scenes programming and planning. With the accessibility afforded by technology and social media, there is also a heightened degree of out-of-session questions and client care these days. So, with the introduction of real industry experience required prior to the completion of their Certificate IV, new trainers will have an understanding of what to expect if they are offered a role in a club.

OFFERINGS

Other than the free Team Workouts, do you have plans to expand into the area of small group training?

We’ve definitely got some new programs in the works, which I’ll be able to discuss at a later stage. We have got freestyle areas in all of our clubs now, so beyond the small group training initiatives, these will enable our members to get into some functional training with kettle bells, VIPRs, and TRX equipment, just to name a few. Once you get into functional training it’s hard to look back. The real motion aspect of the areas gives our members the freedom to move, and to exercise in a way that supports real life activities.

Do you have plans for any other new programs?

There’s a lot on the go – for example we have just rolled out Flow Yoga in all our clubs. Flow Yoga makes yoga accessible to everyone. It has three levels; Gentle Flow for absolutely everyone, Dynamic Flow for those who want to challenge themselves and Hot Flow in our clubs with heated studios. Our fitness team is working on some new group exercise class formats to give everyone the opportunity to squeeze a workout into their schedule.

Does Fitness First intend to continue using only PPCA-free music, or will it revert to using original artist material in its group exercise classes?

At this stage we will continue to use PPCA-free music. We constantly review this stance; however in the short term we do not see any need to change our current policies.

What do you want people to think when they hear the name ‘Fitness First’?

Fitness First is the industry leader of fitness in Australia – building on that, I would like our business to be known for the experience we deliver to our members with regard to the best facilities, second-to-none service standards and our fitness initiatives and innovation. Beyond that, it is our vision to motivate our members to return to the club time after time and perceive it as an enjoyable and rewarding place to visit.