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The gym model is a “leaky bucket” and “makes no sense”, says Virgin Active group CEO Dean Kowarski, who is prioritising retention
Group CEO of Virgin Active and healthy food brands Kauai and Nü, Dean Kowarski, is now presenting live on stage at the HCM Summit in London.
It’s already been an inspiring morning at the QEII Centre in London, with Kowarski following lively talks from Oliver Patrick, co-founder of Future Practice and Pillar Wellbeing; CEO of The Gym Group, Will Orr and managing director of Jims Fitness, PJ Nuitten, on to the stage in front of some 300 delegates.
Kowarski – who is interviewed in the most recent issue of HCM – is talking about how his journey into nutrition and fitness started with his recovery from Crohn’s disease, inspiring him to launch the healthy food business and go on to buy Virgin Active.
With 225 health clubs and 233 restaurants, the company's mission is to empower people to change their lives.
Over the last few years, under Kowarski’s watch, Virgin Active has been overhauled to allow for fast expansion. The company is now agile enough to move into new territories without having to set up a head office first.
The food business is mission critical: “The more members engage with the food, the quicker they see results – because they’re eating healthily and are more motivated – it drives usage of the gym and is another reason to come back.”
Coming from a background in finance, Kowarski was “shocked” by the “leaky bucket” gym model.
“Churn of 40-50 per cent each year means that even if operators are selling, selling, selling, it just flows out of the bucket. This business model makes no sense and doesn’t work for anyone. We’re moving to a better model.”
Kowarski is tackling this by becoming the second space, creating clubs where people can spend the entire day: arrive in the morning to train, then work in the co-working areas or use meeting rooms, nourish themselves in the restaurants and then have another workout before going home.
“The reason we exist is to change people’s lives for the better through wellness and our ability to achieve our purpose is significantly increased when we are more than just a gym.”
Kowarski says the brand is "playing in the premium space" and highlights how the group is diversifying its offering to offer its members "a social wellness club" concept.
The group's expansion strategy involves future growth in both existing and new territories, "we're securing iconic flagship locations in major global cities".
Kauai is providing the food for delegates in the upcoming break here at the Summit, before our next speakers.
Belinda Steward, who took the helm of Places Leisure earlier this year, will be on stage at 11.30. Steward will be followed by Fitness First CEO, Justin Musgrove and Les Mills CEO, Phillip Mills.
You can watch their talks via the the live stream.
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