Gym chain weighs up next phase of expansion with £5.5m funding deal

BUDGET gym operator Xercise4Less is targeting the launch of 15 new sites across the UK this year after securing a £5.5m funding package.

Leeds-headquartered Xercise4Less, which was founded by former professional rugby player Jon Wright in 2006, plans to rollout 100 gyms in total over the next five years, creating around 4,000 jobs.

Having secured a £5m equity investment from BGF (Business Growth Fund) in 2013 to support its rollout strategy, Xercise4Less now has 15 gyms predominantly across the North of England and a membership base of over 120,000 people.

This round of funding from Lloyds Bank will enable the company to finance the next stage of its ambitious rollout plan, including a move into Scotland and the South where it currently does not have a presence.

Jon Wright, CEO of Xercise4Less, said: “This further support from Lloyds Bank will enable us to accelerate the rollout of our large format budget gym offering which is deep rooted in providing the best variety of equipment at the lowest price to our customers. We have already handpicked excellent locations in a number of regions throughout the UK where we plan to launch and hope to continue this momentum to expand to over 100 sites in the next five years.”

Martin Beckett, director in the strategic finance team at Lloyds Bank Commercial Banking, added: “The budget gym sector continues to grow strongly and Xercise4Less is well placed to capitalise on the strong demand for reasonably priced, high quality fitness facilities. This deal reinforces our belief in the management team’s growth strategy for the company, which we have supported since it began in 2006.”

Richard Taylor, investment director at BGF in the North of England and Xercise4Less board member, said: “Having strengthened its management team with the appointment of a highly experienced finance director and chairman in 2013, this important round of financing from one of our own shareholders will help Xercise4Less to grow its unique offering into other regions of the UK. It is a great example of how equity investment provided by BGF can also help unlock debt funding and strengthen a company’s balance sheet for future growth.”

Legal advice for the transaction was provided by Addleshaw Goddard (Lloyds Bank), Walker Morris (Xercise4Less) and Squire Sanders (BGF).