Britain’s biggest gym operator, Pure Gym, has abandoned plans to float on the London Stock Exchange, blaming weak investor enthusiasm for new public listings.
Less than a month after announcing plans for a stock market listing, the no-frills fitness chain said current market volatility meant it was no longer in the long-term interests of the company.
Humphrey Cobbold, the chief executive, 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.”
The private equity-owned company had been hoping to raise £190m from the listing to pay off debts and fund expansion.
Sources said that although the group had received sufficient orders to cover the initial public offering, the level of support was not as strong as hoped and the challenging market conditions convinced the board to pull the plug on the plans.
Last month Spain’s Telefonica cancelled plans to float its infrastructure business Telxius following weak investor demand for the shares.
The Leeds-based Pure Gym business was founded in 2008, and following a period of rapid expansion it is now the UK’s largest gym operator with 169 gyms and 820,000 members across the UK.
Last year it bought the rival chain LA Fitness and struck up a partnership with Olympian Sir Chris Hoy, who is a “special adviser and brand ambassador” to Pure Gym.
Cobbold said Pure Gym was still well positioned for growth: “This year alone we have opened 35 new Pure Gyms and had over 150,000 new members join. Current trading is strong giving us further confidence that we can capitalise on the significant market opportunity and encourage even more people to become fitter and healthier.”
Pure Gym says its members benefit from affordable fees without being tied into fixed-term contracts. Gyms are accessible at any time of day and night, and the lack of swimming pools, saunas and cafes helps to reduce the company’s fixed costs.
