Pure Gym planning expansion exercise with branch openings

Peter Roberts, chief executive of Pure Gym, said he wants to open between 12 and 15 of the 24-hour, low cost gyms each year. The firm, which is based in Ripon, has been dubbed the easyJet of the gym world because of its model.

Mr Roberts, who was previously chief executive of hotel group Golden Tulip UK, said Pure Gym had won customers by not putting them in the stranglehold of long-term contracts. The firm's expansion had been slowed, however, by the difficulty of finding good quality sites around the country.

He was speaking in his first newspaper interview since winning 10m backing from Magenta Partners, the investment vehicle set up by Tom Singh, the New Look entrepreneur, the Taylor family, which set up and previously owned Game Group, the high street computer games firm, and existing shareholders.

Magenta and the Taylors' stakes come to 20 per cent altogether.

Mr Roberts said: "We probably benefited from launching in a slowdown but I don't think it will change when it (the economy) bounces back. Look at low-cost firms like Easyjet and Primark – they have become a way of life. We charge less but want to run the business well, or people will leave.

"The concept is that there is no contract. People can pay and come as they like. It helps shift workers and insomniacs."

Pure Gym, which is owned by a group of 20 shareholders, as well as having backing from Magenta and the Taylors, was set up in February last year. It has seven branches at the moment – including in Leeds, Sheffield, Manchester and Edinburgh – with three more sites going through their legal stages, Mr Roberts said. This should mean they have between 10 and 12 by the end of this year and 25 by the end of 2011.

About 1m is invested in each gym before it opens. The firm started off with sites of about 15,000 sq ft but is moving to bases of about 20,000 sq ft.

It has been hard finding suitable spaces, however, with many former offices ruled out for practical reasons, such as the ceilings not being sufficiently high. Mr Roberts said 600 possible locations had crossed his desk just to select the current sites in operation or development.

"The property finding angle is not as easy as I thought it would be and with a lot of retail properties the rents are too high – still.

"The good properties you cannot afford to be in and the bad properties are available but they are empty for a reason. The whole business of finding the sites is very time-consuming. They (also) need to be on good public transport routes."

Pure Gym can keep costs low – monthly membership is around 15.99 with introductory offers of 9.99 at some centres – because it does not provide swimming pools or spas. It also needs fewer staff during the night, and outsources cleaning, maintenance and IT.

It has about 10 staff at its head office.

Mr Roberts said the firm had also won customers who had previously been tied up in long-term contracts at rival firms, some of which automatically renewed people's membership unless they chose to cancel the agreement.

Magenta Partners is the investment vehicle backed by Tom Singh's Family Trusts, which were set up by the retail entrepreneur.

Mr SIngh founded New Look in 1969 with a single store. The women's fashion chain was taken private in 2004 by buyout firms Apax Partners and Permira for 700m, with Mr Singh retaining a stake.

Today it operates more than 750 branches in the UK and Europe and Mr Singh's worth has been estimated at 500m. He was an active executive board member until March 2006 and is now a non-exec.

The budget leisure sector appears to be growing; last week, the Yorkshire Post reported on the expansion plans of another budget gym, Castleford-based Xercise 4 Less.

From hotels to health clubs ...

Peter Roberts was born the son of a Bradford solicitor who became a North Yorkshire farmer.

His late father, William, was a director of Newcastle Breweries and Associated Dairies (before it became Asda) who bought a farm in the Dales.

His career goes back to 1980 when he found a site in the Lake District and developed an all-year-round holiday resort called Langdale with the backing of cash from private investors.

He later lost more than 1m as a Lloyds name but went on to run hotel group Golden Tulip UK, which was sold to Whitbread in 2007 for 45m.

He also helped set up major nightclub operator Luminar Leisure and is a former director of Dragons Health Clubs.