Working out well: Third Space eyes suburban locations for expansion pipeline
Luxury health club brand Third Space is eyeing more locations in suburban areas, as opposed to in office hotspots, its CEO has told Morning Wire
Third Space offers members “a combination of expertise and luxury” and caters to “fitness savvy enthusiasts” as opposed to “first timers”, with members who “like the finer things in life,” Colin Waggett explained.
Third Space’s estate currently boasts eight locations, including sites in Tower Bridge, the City, and Canary Wharf.
The health club is opening a new site in Moorgate this autumn, followed by locations in Battersea, Wimbledon and Wood Wharf.
Pre-Covid, the company’s strategy had been to “build a network of clubs with a mixture of city centre and more local suburban clubs.” Offering members the option to use more than one club pushes up the value of the offering.
The need for a mix of locations “intensified [after Covid-19] given current working patterns,” he added, with hybrid working making the brand “more akin” to suburban areas “versus the Moorgates of the world.”
The pandemic gave rise to support for a Parisian model of 15-minute cities, with people looking to have all required amenities within walking distance of their homes.
After re-opening post-lockdown, visits to Third Space clubs have “steadily grown week-by-week” with the brand “back to where we wanted to be,” Waggett said.
However, pockets of the capital, such as “the heart of the City,” were still quieter than the West End.
Luckily, there are lots of residents living in areas like Canary Wharf, as well as working. “Therefore, even if they’re not going to the office, they might come to the club,” he said.
Despite a cost of living crunch , over the past four weeks, Third Space has seen rates of sales for new memberships “significantly in excess of 2019.”
Making a more general statement about the gym and leisure industry, Waggett said “we are a very resilient business,” more so than treats like dining out, due to the benefits of a healthy lifestyle. “[I am] reasonably optimistic the consumer side of things is not a main challenge,” he said.
However, intense increases in energy bills are threatening to wound the firm.
Waggett said without further government support, soaring energy bills for its hot yoga studios and pools could see it forced to pass on costs to members.
“We sincerely hope that support is extended beyond this crisis period,” he said.
Without further support, the elevated headwinds would have “to be passed onto customers at some point, which we’d rather not have to do.”
The businessman dubbed government proposals for a six-month business support scheme, offering equivalent support to households, as “in principle, very welcome” but said he awaited more details.
He dubbed the current landscape for trying to secure new fixed contracts as “a Wild West” and an “extremely complicated and volatile area.”