UP to 400 jobs are expected to be created in Yorkshire over the next two years by a low cost gym chain.
Jon Wright, the founder of Leeds-based Xercise4less, hopes to open another 10 Yorkshire gyms by early 2017, as part of an expansion strategy which includes plans to enter the European market.
The company has secured £31m in funding to help it grow around the UK. Mr Wright said he was looking at sites across Yorkshire for new gyms, including possible locations in York, Huddersfield, Halifax and Bradford.
Xercise4less already has six gyms in Yorkshire, in places such as Hull and Leeds.
Mr Wright said: “The only budget thing about Xercise4less is the price.”
Xercise4Less has attracted a further £5m equity investment from BGF (the Business Growth Fund), as well as an increased debt facility of £20m with Lloyds Bank Commercial Banking and a further £6m in asset finance and leasing facilities.
The latest round of funding comes as the Yorkshire-based gym chain, whose turnover has almost doubled in the last year, steps up its plans for expansion around the UK.
The Leeds-based business is planning to open its first site inside the M25, at Hounslow later this year, and further sites are planned in London and the South East.
Over the last 18 months, Xercise4Less has opened 15 gyms, bringing the total to 24.
It now has more than 180,000 members, and the business is on track this year to achieve a turnover of around £30m and EBITDA (earnings before interest, taxation, depreciation and amortisation) of approximately £10m.
BGF, which offers long-term capital and follow-on investment, has now invested £12m in the company, after its initial commitment of £5m in August 2013, and a further injection of £2m in May last year.
Xercise4Less was founded in 2006 by Mr Wright, an ex-rugby player, from a single unit in Castleford, West Yorkshire.
Mr Wright, who is the company’s chief executive, said: “We are less than half way through a five year plan, with ambitions to grow to over 100 gyms nationwide and create more than 4,000 jobs. Our growth has really accelerated in the 18 months since BGF’s first investment. Gaining the backing of a minority equity investor has lent us additional credibility, and played a big role in helping us to increase our lending agreements with Lloyds Bank and others.
“Having investment backing of this kind enables me to fully realise my vision for the business and drive it forward at the pace it needs for us to further disrupt the leisure industry and strengthen our place amongst the big players.”
Mr Wright said that Scotland had proved “very fertile” for Xercise4less, and he planned to start looking at the European market next year. In the longer term, Xercise4less hopes to enter the market in Spain and Germany.
Richard Taylor, the investment director at BGF, said: “Xercise4Less, led by a strong management team, has been on an impressive upward sales and profitability trajectory and we’re looking forward to continuing the roll-out of their popular low cost model nationwide.
“This is a great example of equity and debt working hand-in-hand to support growth.”
Matthew Pollard, Martin Beckett and Saran Lall from Lloyds Bank’s Yorkshire-based mid market and strategic finance teams provided the enlarged debt facility.
Mr Beckett said: “The management team at Xercise4Less has built a successful business based around the principle of providing consumers with access to high quality fitness facilities at affordable prices.”