Branson’s Virgin Active flags Aussie expansion

Richard Branson’s Virgin Group will dramatically expand its chain of Virgin Active health clubs in Australia, in a $40 million move that will see the brand grow beyond its Sydney and Melbourne foothold.

Virgin Active has a presence in Britain, Italy, Spain, Portugal and South Africa – in addition to four clubs across Sydney and Melbourne – boasting more than 170 clubs in total and more than 900,000 members.

Branson has indicated that Virgin Group wants to open up to 20 new clubs in Australia over the next four years, with as many as 30 sites believed to be under consideration across the country.

“With anything, we try to build the best. And if you build the best health club in a city, the best normally survives and thrives,” Branson told The Australian.

“We now have about 300 health clubs around the world; it is a very successful business for us, and I think in Australia the Virgin brand is very strong and the health clubs have been extremely well received.”

Virgin Group opened its first Australian club in Sydney’s Frenchs Forest in late 2008, claiming the move was a direct response to “consumer dissatisfaction with the current gym offerings”.

“Virgin Active will redefine the gym experience in Australia with world-class facilities, a friendly, welcoming environment and that great value for money and customer service that people have come to expect from Virgin,” the company said at the time.

Virgin Group will reportedly spend more than $40 million to expand its Australian network of Virgin Active clubs, but local operators say they’re not too worried.

David Ciantar, Australian general manager for fitness franchise Anytime Fitness, says while Virgin Active has a “fantastic” offering, it doesn’t see the company as a direct competitor.

“We’re a franchise business so we work with franchisees… We’re dealing with franchisees who are very entrepreneurial; they want to make their club a success in their local market,” Ciantar says.

“We focus on being member-centric, so ensuring that they become the focus of the club.”

Earlier this year, Anytime Fitness was listed among the top 10 franchises in the 2011 Topfranchise Awards, announced by Topfranchise.com.au, for its franchisee support.

Ciantar also points out that Anytime Fitness is – as the name suggests – open at anytime, operating on a 24-hour basis.

“I could think of a couple of different brands that might suffer as a result of Virgin’s offering… and while we acknowledge that they’re in the market, our business model is somewhat different,” he says.

In addition to its expansion plans for Virgin Active, Virgin Group has flagged a move into Australian hotels, although Branson claims the company’s current focus is the US market.

Last year, Virgin Group revealed it had conducted preliminary work in Australia with a view to eventually offering a 4.5-star hotel operation at four-star prices, but Branson has stressed the project remains at an exploratory stage.