Virgin Active plans flexible pricing and online deals to combat work-from-home trends

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Virgin Active says its clubs in South Africa are showing good traction on resuming membership following a lifting of capacity restrictions under lockdown regulations in February 2022.

Since the easing of coronavirus restrictions and the removal of capacity restrictions in the first quarter of 2022, Virgin Active South Africa said its sales had returned to levels similar to those of 2019, with active members increasing from 497,000 at the end of December 2021 to 557,000 in May.

Member engagement and usage levels continue to improve and termination levels have fallen, comparing favorably to 2019 levels, holding company Brait said Tuesday (June 21) when announcing financial results for the fiscal year. closed in March 2022.

Virgin, which accounts for 44% of Brait’s total assets, had a major year to complete its debt restructuring and refinancing plan, raising R1.8 billion of new capital in the group. He said significant work has been done over the past 24 months to preserve cash, restructure the business and raise additional capital to provide a strong platform for recovery and growth.

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Earlier in June, Virgin Active South Africa appointed Jessica Spira as its new chief executive effective October 1, 2022.

“With Jessica as MD and a strong team, Virgin Active South Africa will be able to capitalize on the rapidly growing health, wellness and fitness market, and enable Virgin Active to deliver new experiences and innovative products to the South African consumer,” said Dean Kowarski, Global Managing Director, Virgin Active Group.

“We are seeing an increased demand for community exercise and a shift away from online fitness in the pandemic era. Leadership in the gym industry has been dominated by men, so Jessica’s appointment will bring a fresh perspective.

Virgin Active also recently announced that it has acquired The Real Foods Group’s nutritional assets, including 204 stores in Kauai, for £28.6 million. This acquisition is in the process of regulatory approval.

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Looking ahead, the group said it will focus its spending on “rejuvenating the field” and boosting member engagement over the next few years.

With sites in the UK, Australia, Thailand and Italy, Virgin highlighted strong member base growth since the start of the calendar year in key territories, rising from 754,000 active members at the end of December 2021 to 847,000 currently active members – with a significant reduction in frozen members.

The group said that although all gyms are now open, the business continues to be affected by work-from-home trends.

Brait said the book value of its investment in Virgin Active at the closing date is R8.28 billion (FY21: R7.97 million) and comprises 44% of Brait’s total assets (FY21: R45 %).

Virgin Active is aiming to significantly expand its footprint with state-of-the-art clubs in Italy and Asia-Pacific. For South Africa, he said if his clubs have a strong position in the market, they need investment in facilities, products and digital.

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Virgin said it will expand the primarily bricks-and-mortar offering to digital and also invest in the member experience in certain geographies, particularly South Africa.

It will also implement a flexible pricing model, although details on that have yet to be released. In a statement on Monday, Discovery Bank announced several new features being rolled out for its customers, including changes to Vitality Travel and a paid gym option, with Virgin Active.

The group stressed a “gradual and iterative implementation of flexible membership models,” going forward.

To combat work-from-home trends, Virgin said it would design an online offering to complement the club experience and expand its reach and levels of engagement. He highlighted a “hybrid business” model with home workouts combined with personalized group workouts, health apps, delivery services and virtual reality – all supported numerically.


Read: 3 big changes coming to Discovery Bank – including paid gym

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