Virgin Active co-founder Frank Reed is looking to expand his gym chain Sweat! across the UK.
Sweat! is seeking to build a portfolio of 35 sites over the next three years and is targeting surplus space in department stores and supermarkets.
It is already working with Debenhams as the department store chain looks to revive its business.
Sweat! launched in 2013 and currently operates five sites – in Walsall, Sheffield, Glasgow, Greater Manchester and Chelmsford.
It requires a minimum of 15,000 sq ft and up to a maximum of 25,000 sq ft to trade off two floors with a ceiling height of 3.5 metres and a floor loading capacity of 5 kilo-newtons.
Major cities considered
The brand will consider all major cities, shopping centres, high street locations and retail parks. It is looking at sites with prominent roadside locations and is focusing on greater London sites close to transport hubs and Tube stations.
Target cities outside London include Aberdeen, Bristol, Cardiff, Liverpool, Manchester, Portsmouth and Southampton. Outside London the chain would look to pay rent of around £12 per sq ft.
Sweat! has focused on attracting female customers. It promotes “friendly fitness” and focuses on classes and cardio above weights.
The group says it has 600 to 800 visits to each of its five gyms every day and a customer base that is 55% female.
It has three spaces under offer with Debenhams, and will continue to look for further opportunities across retail estates that have surplus space.
Reed said: “This is a chance to link health with retail, combine data bases, and offer something innovative to drive footfall for Debenhams shoppers and Sweat! members.
New breed of gym
“We are excited about being a part of the Debenhams Redesigned programme (see below) and are looking forward to opening a new breed of gym for the retail environment.”
Sweat! has funding in place to finance its expansion. Pret a Manger co-founder Sinclair Beecham is one of its backers.
At the end of last year Reed received £3.7m of equity investment from Puma Investments to help fund the next five sites in its expansion plan. The deal includes an option for further equity investment of £2.5m after 12 months.
The first Debenhams site is scheduled to open in May, the second in September and the third in October. Applications have been submitted for conversion into D2 leisure.
Braiser Freeth is advising Sweat!.
Department stores’ alternative solutions
Debenhams chief executive Sergio Bucher launched the Debenhams Redesigned programme in April 2017 as part of a strategy to make better use of its portfolio and drive footfall.
It is not the only retailer attempting to diversify the department store customer experience: House of Fraser has launched experience-centric initiatives as part of its five-year plan, including in-store champagne bars.
Alongside its partnership with Sweat!, Debenhams has launched a joint venture with beauty services chain Blow, in which it bought a stake last year. Two Blow beauty bars are now in operation, in Debenhams’ Bullring Birmingham and Oxford Street, W1, stores. The bars occupy around 500 sq ft and the retailer is looking to expand across the Debenhams estate.
Debenhams is also working with coffee/juice bar chain Joe & The Juice, which now has bars in its department stores in Clapham Junction, SW4, Manchester City and Manchester Trafford. The bars each occupy around 900 sq ft. It has also opened a prosecco bar, Frizzenti’s Fizz Bar, in its Manchester stores.
Debenhams is also looking at converting space into co-working offices and is targeting university towns and cities where there is a greater demand for study space. No deals have yet been agreed.
A source said: “What Debenhams has realised is that it is not about handing space back [to the landlord], it is about making that space more exciting.”
However, creating the space for new ventures within existing stores can be a long and costly process. The source added: “The issue is the cost. It is very expensive to convert. In the first instance it is [the department store] that has the long lease and so it is down to it to do it. Conversion can cost up to £100 per sq ft, which is before you start playing around with access. So it is a big investment.
“The positive is that department stores don’t pay very big rents, so if they can crack it, then there is a huge solution here. But it needs to be space that interacts with the retail environment.”
Debenhams is not alone in its pursuit for alternative uses for its space. John Lewis has been offering The Residence experience, which allows customers to spend the night in a catered 1,500 sq ft John Lewis-designed flat in its Oxford Street, W1, Cambridge and Liverpool stores.
Luxury department store Selfridges is making the most of its prominent West End footprint and is opening a new 3,500 sq ft boxing gym on the lower ground floor of its Oxford Street store at the end of the month.
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