Fitness chain Pure Gym has blamed “market volatility” for its decision to scrap plans for a stock market flotation.
The Leeds-based group had aimed to raise £190 million from its initial public offering (IPO), announced less than a month ago, to help fund ambitious expansion plans.
But today, the firm’s chief executive, Humphrey Cobbold, said: “Given the challenging IPO market conditions, the board has decided not to proceed with a listing despite the strong interest shown by potential investors. Pure Gym’s excellent growth track record and market leading position give us a solid platform for further expansion in the attractive gym market. This year alone we have opened 35 new Pure Gyms and had over 150,000 new members join. Current trading is strong giving us furtherconfidence that we can capitalise on the significant market opportunity and encourage even more people to become fitter and healthier.”
Pure Gym was founded in 2008 and now has 169 gyms and 820,000 members nationwide, boosted by the takeover last year of rival LA Fitness.
In May 2013, funds affiliated with CCMP Capital Advisors, LLC bought a majority stake in the business.
Last month, Pure Gym said that it wanted to open between 20 and 25 gyms each year, while also looking at possible similar ventures such as its Pure Ride indoor cycling and spin experience studio in Moorgate, London, which was developed with sixtime Olympic track cycling champion Sir Chris Hoy.
Sir Chris joined Pure Gym in June last year as a brand ambassador, a role that also saw him become an investor in the business.
In November last year, The Gym Group, the company’s low cost rival, secured a listing.
However, The Gym Group’s shares have had a bumpy ride, at one stage falling below their initial IPO price in the turmoil after the vote in favour of Brexit.
Pure Gym saw its earnings lift by 46 per cent to £28m in 2015 following the completion of its purchase of LA Fitness for a sum which was believed to be between £60m and £80m.
The business has converted LA Fitness sites to Pure Gyms as part of a £30m investment programme. The company also strengthened its management team last year, as it geared up for further growth.
Pure Gym is classed as a budget fitness business, with most of its sites open 24 hours a day.
Members pay monthly fees rather than signing long contract commitments. The firm was founded by health club veteran and executive chairman Peter Roberts, who launched its first two gyms in Manchester and Leeds in November 2009.
Earlier this year, Pure Gym revealed that it had signed a three-year partnership with The Great Run Company, the UK’s biggest mass participation running series, which will see Pure Gym as a lead sponsor and provider of pop-up gyms’ at running events across the UK including the Great North Run, Great South Run and the Great Manchester Run.
Last month, Pure Gym said it hoped the planned IPO would further seal its position as the biggest gym group in the UK’s £4.4bn health and fitness market.
UK stock market listings had been expected to bounce back following a post-Brexit vote slump, with the likes of Hollywood Bowl and Biffa pushing the button on IPOs. But the collapse in sterling and growing uncertainty about Britain’s relationship with the European Union, have dampened confidence.