Planet Fitness Moves to Expand Internationally

By Sophia Kornienko

Staff Writer

Published: June 29, 2004 (Issue # 981)

ALEXANDER BELENKY / The St. Petersburg Times A group of women participating in aerobics session, the specialization of a Planet Fitness club on Moskovsky Prospekt.

Planet Fitness, a local fitness-club chain, is going international and will open three new sport clubs in Stockholm, Sweden, one of them this year.

The chain will also open two new clubs in St. Petersburg next year and continue expanding into other regions and the NIS, said Marina Sorokina, director of Planet Fitness St. Petersburg during the company's open day on Thursday.

Established in 1997, Planet Fitness owns 19 clubs across the country, eight of them in St. Petersburg. Two of the St. Petersburg clubs, that used to operate under the World Gym brand, were purchased only this spring for up to $4 million, analysts estimate.

Among other projects pursued by Planet Fitness are franchise clubs in Samara and Kazan in Russia, Almaty in Kazakhstan and fitness consulting services in Minsk, Belarus. Planet Fitness also runs a club in Kiev, Ukraine.

The founder and president of Planet Fitness, Irina Razumova spent ten years in Sweden and advocates development of non-elitist fitness club chains, following the European model of comfort.

Planet Fitness is a Russian owned brand with 100 percent domestic private capital. In Sweden's competitive fitness market with over 1,500 operating clubs, the company hopes to offer alternative organizational techniques, including individual medical and sports counselling, at affordable rates, Sorokina said.

Planet Fitness will offer a range of activities for a flat fee, as opposed to an entrance fee plus payments per activity, as usually practiced by most Swedish clubs. The first Russian fitness club in Stockholm, occupying a total of over 3,000 square meters, was set to open this spring, but the construction was delayed, Sorokina said.

The chain's St. Petersburg clubs all have the same quality services and equipment available, even though each club is following a different price policy, depending on the numbers of additional services it offers, Sorokina said.

The clubs range from a 300 square meter "fitness studio" on Moskovsky Prospekt specializing purely in group aerobics, to the 4,000 square meter giant on the Petrograd Side, open round the clock. Membership rates vary from $20 for a one day visit to one club to $2,000 for a full annual membership with unlimited access to all Planet Fitness clubs in Moscow, St. Petersburg and Kiev. Most clubs support the "$1 per day" policy.

As part of a recently developed strategy, Planet Fitness plans expanding to densely populated city outskirts, Sorokina said. The company's first club in the north of St. Petersburg opened on Prospekt Engelsa in April this year. Up to 15 percent of Planet Fitness members in the city are foreigners, Sorokina said, adding that about three fourths of the chain's personnel speak English.

In Sorokina's opinion, "There is no other such player in the St. Petersburg market as Planet Fitness." SportLife and Galaktika can be referred to as the chain's competitors in the city, but they are very small, she said.

However, Anastasia Borisova, advertisement manager at Galaktika, said that chain fitness clubs lose out in traditions and atmosphere.

Galaktika occupied 60 percent of the St. Petersburg market before Planet Fitness began its expansion. Galaktika runs two clubs and plans to open a third one within a year. The company bets on its loyal staff team rather than on growth ambitions, Borisova said. At Planet Fitness, staff changes frequently and there is not enough homey club environment, she said.

It should take another two years for the city fitness market to shape up, and there is definitely room for new players, Borisova said.

One of the newcomers expected soon is the Moscow-based sports-club chain Strata Partners that plans to open 60 affordable fitness clubs in all of Russia's largest cities starting this year. Moscow has already seen two Strata Partners' ambitious projects - Super Gym and Orange Fitness.

"We have no doubts that the future is after the chains. Chain projects occupy 58 percent of the market in the U.K. and 75 percent in France," said general director of Strata Partners Anastasia Yusina in a recent interview with RosBusinessConsulting.