Current Issue 52
Virgin Active is flexing its muscles in Southern Africa, boosted by an owner who considers local enrichment a priority, and an industry standing recently bolstered by its attendance at Retail Congress Africa
Live Happily Ever Active
Writer: Matthew Staff
Project Manager: Callum Philp
The Virgin Active SA (VASA) footprint was established in 2001 when Nelson Mandela phoned Richard Branson to ask him to save thousands of jobs by taking over the liquidated Health and Racquet Club. Branson agreed and set in motion what was to become one of South Africa’s most loved and instantly recognisable brands.
Virgin Active’s success has been built on a strategy that focuses on three key factors: Location; the use of precise demographics to ensure the clubs are situated in large catchments where the demand will support building large facilities. Value: large facilities allow the company to drive economies of scale which provide the opportunity to offer outstanding value for money with comprehensive multi-use facilities at competitive prices. Service; Virgin Active is a dynamic business with one of the world’s most recognisable global brands, which enables the company to attract great people who are very passionate about customer service.
An effective recruitment, performance and talent management process is critical to the success of the business, with emphasis placed on proactive identification of future talent that supports the organisation’s strategic plans and championing of VASA’s values. In turn, the Company proved to be an extremely attractive business proposition.
In April, 2015, CVC and Virgin Group announced that Brait had acquired a controlling interest in Virgin Active in a transaction that put an enterprise value on the business of £1.3 billion. Brait’s experience in long-term global investments, as well as in Virgin Active’s biggest market, South Africa, fitted with Virgin Active’s aspirations for international growth in both emerging and developed markets, and would enable the Company to accelerate its proven strategy.
Today, Virgin Active South Africa is one of the success stories in the global portfolio with 122 clubs in SA, across a broad consumer offering consisting of three tiers.
At the apex is the luxury Classic Collection; a portfolio of clubs designed for health and wellness enthusiasts who want year-round access to the latest fitness trends and innovations in a luxury health club environment. Members are also able to enjoy reciprocal access to other Classic clubs around the world, making membership a true passport to luxury. In South Africa, Virgin Active has three such clubs with two further clubs in the pipeline for 2016.
All told, Virgin Active has 112 Health Clubs, on average more than 3,200 square metres metres in size, and constituting the largest proportion of the estate’s offering. These double storey health clubs offer a wide range of activities under one roof, from top quality cardio equipment and specialist cycles, four to eight-lane heated pools or a more gentle style of exercise, such as yoga and Pilates. The majority of these clubs also offer a Club V facility for children and are geared towards active play and growing membership from an early age.
Gym made easy
Virgin Active’s latest innovation was launched in mid-2014. Billed as “gym made easy”, the new Virgin Active RED clubs offer South Africans in the emerging market an enticing value proposition while delivering the latest and most innovative equipment. Seven clubs were opened between mid-2014 to the end of 2015, and eight to 10 more are planned in 2016 with a similar number in the pipeline for several years thereafter.
One RED club celebrated a ‘red letter’ day in November with a visit to RED Jabulani in Soweto from Sir Richard Branson. The brand CEO, who last visited four years ago for the launch of the first Virgin Active Health Club in Soweto, said he was “thrilled to be back and to experience the infectious atmosphere and energy of the club, the staff and the members”.
“This is an exciting new market for Virgin Active,” agrees Managing Director (MD), Ross Faragher-Thomas. “An opportunity for all South Africans to join a club that caters to their financial and health needs.
“This doesn’t mean low cost, but rather clubs geared around a unique consumer category underpinned by the strong Virgin brand.”
In 2016, Virgin Active SA will open a further eight to 10 Virgin Active RED clubs and two Classic Collection clubs; one at the iconic new precinct at the V&A Waterfront, Cape Town and one in Pretoria, Gauteng province.
Faragher-Thomas sees the strong growth as a result of opportunities offered by South Africa’s diversity: “We understand that South Africa is unique and have made it our business to understand our members, what works for them and then cater to them. The existing population is transitioning through LSM levels and we have ensured that our clubs are positioned to attract each market segment.”
Virgin Active has had a significant impact on how South Africans view health and wellness. The clubs have become ‘third spaces’ (after the home and the office) and as such, have become destinations for much more than just getting fit. It is a place where families sign up to share a journey of wellness. The clubs have become a truly open and welcoming South African space.
Every year, new products are designed and launched to not only reflect global trends but to create a unique South African offering. Notable products over the years have included The Grid, an innovative programme based on high intensity interval training designed to get people moving better, faster and more effectively using six primal movements. Classes combine strength, cardio and flexibility with members working out at their own pace and level.
This formula has also proved highly ‘exportable’ to neighbouring African countries for several reasons. Botswana’s proximity to South Africa, the fact that the country’s economy is stable and flourishing, and the added incentive of government and business leaders being extremely welcoming to Virgin Active, were all compelling reasons for Virgin Active’s first foray into Africa after the success of its Namibian operation.
Many countries now have the potential to host the Virgin Active brand in the future; particularly those with growing economies, stability and a real desire to make activeness a part of their lives. Virgin Active’s next destination will be Kenya, a development in the pipeline for 2016.
A Force for Good
From a corporate social responsibility perspective, Virgin Active has embarked on a journey termed ‘Business as a Force for Good’. As a force for good, any actions must be simultaneously environmentally-sound, socially-just and economically sustainable.
Business as a Force for Good is a strategy focused around creating opportunities to collaborate with as many stakeholders as possible to create synergies that impact people and the planet in a positive way, from suppliers to strategic partners and all the way through to members and staff.
One of the most significant partnerships between Virgin Active’s Business as a Force for Good division and a supplier has been with Damascus Fitness Equipment, who supplies more than 180 fitness outlets in South Africa. Virgin Active officially became Damascus’s enterprise development partners in 2013.
Faragher-Thomas says: “We could see that our Company could play a strong role in growing and creating jobs, which is integral to our Business as a Force for Good strategy.
“In turn, using a local upholsterer that maintained international standards meant we were spending less on importing goods with the added benefit of a better, faster service.”
Virgin Active is also the official Health Club partner of SA rugby and cricket teams, the Springboks and the Proteas, as well as the SA men’s and women’s hockey teams. The Company strongly supports up-and-coming community sports stars and para-Olympians to help these sportsmen and women excel in their sports by giving them full access to their increasingly successful health clubs.