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European fitness market,
80 pedals around Europe

The wellness and sports industry in Europe continues to demonstrate resilience and growth.

Gym membership & Health Clubs: A European marvel

One of the most impacted industries during the pandemic was the gyms & health clubs industry, imposed lockdowns to avoid the spread of COVID-19 meant that many people cancelled their subscriptions, and in Europe, membership rates have yet to return to their pre-pandemic numbers.

The chart below shows the pre-pandemic trend in gym membership in Europe, as well as post-pandemic recovery. Gym membership participation is still below pre-pandemic levels, albeit by a small margin. VMR projects the global Health & Fitness industry to reach $169.7bn in 2030, from $91.18bn in 2021.

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Image 1: Total members of gyms in Europe 2021-2022.

Besides analysing the industry as a whole, we would like, as in the sections before, to take a closer look at relevant players in the industry, especially the more upscale and premium gym brands such as Equinox, Virgin Active, and Third Space. We believe that by delving further into this niche section of the industry, we will be able to provide valuable insights into how the fitness and wellness trends have been performing through, again, the intersection between luxury and fitness.

Equinox, the premium worldwide gym brand phenomenon, secured an additional $1.8mn in financing from new and existing investors to refinance maturing loans as well as fund general corporate purposes in March 2024, this round was led by Sixth Street and Silver Lake, including investments from Ares Management, HPS Investment Partners, and L Catterton. This raise came following a 27% increase in revenues for 2023. The company currently operates 107 clubs globally and has a pipeline for over 25 new locations around the globe. This equity raise and revenue increase shows just how much-untapped potential the industry is yet to capture, and interest from big private equity players is usually a sign that there is more to come.

As for Virgin Active, in an investor presentation for the six months ending September 2023, its parent company, Brait PLC, reported revenue growth of 20% yoy in GBP for the business line with active members increasing 11% when compared with the same period in 2022, albeit below pre-pandemic highs. The company also highlighted how both Italy and Singapore are above pre-COVID membership levels and the UK has proven resilient despite macroeconomic headwinds.

Finally, Third Space, the premium London Gym brand was taken private in 2014 by Encore Capital, which then sold its majority position to KSL in 2021. The luxury health club operator received £88.5M from OakNorth Bank and Searchlight Capital Partners in September 2023 for expansion, to scale up by increasing current locations from 8 to 12. CEO Colin Waggett said, “We are seeing exceptionally strong demand for Third Space memberships, with most of our clubs operating with waiting lists...”. Again, the same trends present for Equinox and Virgin Active: Private Equity interest, additional capital funding from big investors, and an increase in the pace of new subscriptions.

Overall, the industry as a whole is yet to return to its pre-pandemic levels, but just like the legacy vs. premium fitness comparison, premium gyms seem to be performing fairly better than the industry average, indicating stranger consumer behaviour trends, especially in the upper social classes.

European Fitness: The benchmark


To better understand the outlook of the wellness & sports industry in Europe, we further analysed another big player in the industry (Technogym) to serve as a proxy for the health of the overall industry.

Any fitness enthusiast who regularly trains indoors has likely come across one of the several Technogym’s machines, often shown off by premium fitness studios during trials or first visits. Technogym was founded in 1983 by Nerio Alessandri in Cesena, Italy with a focus on manufacturing and distributing equipment and digital technologies for fitness, sport and health. Technogym has been an official Supplier to eight Olympic Games including the Tokyo 2020 games. In 2023, Technogym saw revenues increase 12% to €808,091k when compared to FY2022.

Historically, the company has recorded a compound annual growth rate of 9.8% between FY2021 and FY2023. In the beginning of 2023, the Saudi Government’s Neom Investment Fund bought around 6% of Technogym’s share capital as a strategic investment in the sports equipment manufacturer, further showcasing global appetite for the industry. Management attributes such positive results to: “In particular, the Private sector showed a notable rate of acceleration in the second half of the year...” and also highlighted the increase in the number of members and repeat visits to all main clubs it has data access to. Such positive results paired with management’s commentary, show how the pandemic drivers are well underway in 2023 and ahead of 2024, with sport practitioners intensifying their activities, and activity participation rates increasing and returning to pre-pandemic levels.

In its latest annual report, the management outlined how more consumers consider physical exercise as an essential part of their day, also preferring hybrid training through digital ecosystems that can be used via an app, so they can continue training every day in different places if they want. Additionally, there has also been an increase in the demand for companies to have spaces dedicated to physical exercise and services related to the use of assets (software) that allow them to measure and make the most of the investments made.

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Image 2: Technogym revenues 2021-2026E

In its 2023 results press release, Technogym’s management attributed future growth to: “The growth drivers are robust and expanding, primarily health through prevention (Exercise is Medicine), increasingly considered a priority by individuals, businesses, and governments. While the reference market is growing mid-single digits...”. Showcasing the potential for growth by focusing on clients who exercise due to health and wellness concerns, which are now the main target market in expansion.

In conclusion, the wellness and sports industry in Europe continues to demonstrate resilience and growth, as evidenced by the performance of key players like Technogym. With a history of consistent revenue increases and strategic investments, Technogym serves as a robust proxy for the industry's health. The company's success is in part explained by shifting attitudes towards fitness, with more individuals considering physical exercise essential and demanding higher quality training solutions. Moreover, the emphasis on health through prevention, highlighted by Technogym's management and explained in the first chapter of this report, suggests a promising trajectory for future growth, with a focus on catering to clients prioritising health and wellness. As such, the industry appears poised for sustained expansion, driven by evolving consumer preferences and a growing recognition of the importance of fitness in everyday life.

Around Europe in 80 pedals

Now, from wellness to fitness, there are many opportunities arising from long-term demographic trends, and short-term post-pandemic-induced consumer behaviour trends, we would like to focus on a bright, and often overlooked sector of the industry, cycling.

The bicycle industry has experienced significant growth in recent years, fueled by increasing awareness of environmental issues, rising urbanisation, and a shift towards healthier lifestyles. With advancements in technology and innovation, e-bikes have emerged as a popular alternative to traditional bicycles, offering convenience and ease of use, particularly in urban environments. The global bicycle market is projected to continue expanding, driven by government initiatives promoting cycling infrastructure and the growing popularity of electric mobility solutions especially in Europe. In October 2023, the European Commission released the European Declaration on cycling, within the declaration, among other things, expressed the Commission and its member states’ commitment to provide technical support and funding to develop and implement cycling strategies, using funds from EU instruments such as the Social Climate Fund, the Cohesion Fund, the Recovery and Resilience Facility, among other to support such measures. Since the onset of the pandemic, cycling has seen a surge in popularity as more people seek outdoor activities while adhering to social distancing measures during the lockdowns.

The chart below showcases the recent strength, and pandemic boost, in bicycle sales in Europe’s largest economy, Germany. The lockdowns and lack of exercise brought in many new cyclists and returning cyclists to experience the hobby.

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Image 3: Revenues from bicycle sales in Germany 2013-2023..

The resilience of the luxury industry

The luxury industry has been a safe-heaven Industry in which investors found rare comfort and protection from the shocks that sent ripples through the economy such as the Covid-19 pandemic, the Russian invasion of Ukraine, persistent and high inflation, and fast increases in global interest rates. The luxury goods industry is characterised by its premium pricing, exclusive branding, and high-quality craftsmanship. In recent years, there has been a growing trend towards luxury experiences and sustainable consumption, driving demand for unique and environmentally friendly products. The case for luxury is further evidenced by its past overperformance when compared with broader equity indexes, in the past decade, the S&P Global Luxury Index has outperformed the MSCI World Index by approximately 3% on an annualised basis, with most of such overperformance coming after the pandemic, when investors ran to safety in search of companies with strong pricing power and customer base. The table below summarises the recent performance and results from some of the flagship companies of the luxury industry, showcasing the strength in both financial and stock price performance:









The future of luxury

On a macroeconomic level, and based on data and industry analysis from Bain & Co. and UBS: there has been a notable increase in demand for luxury goods globally, driven by emerging markets and the growing wealth of high-net-worth individuals. The global luxury market reached €1.15 trillion globally in 2023, a 10% growth over 2022. UBS projects that the share of the global population with wealth above $1mn will grow from 1.1% of the total (~ 59.4mn individual USD millionaires) in 2022 to 1.5% (~85.9mn individual USD millionaires) by 2027. Also according to UBS, the aggregate wealth of HNWs has grown five-fold from $41.4tn in 2000 to $208.3tn in 2022. Despite economic uncertainties, the appetite for luxury items remains strong, with consumers prioritising quality and exclusivity. The report highlights the resilience of the luxury sector and identifies opportunities for growth in the backdrop of strong macroeconomic long-term trends. Bain expects that the solid fundamentals are poised to continue propelling market growth, albeit leading to relatively soft performance ahead of 2024.

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Image 4: Luxury industry peer group analysis.

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Image 5: Luxury industry growth 2018-2028.

Italian luxury: Fast cars, designer clothes, and bicycles...

Within the luxury sector, luxury bicycles and e-bicycles occupy a niche market catering to affluent consumers who seek both style and functionality in their transportation choices. Within the broader bicycle industry, the luxury bicycle and e-bicycle segment cater to discerning consumers who value design, performance, and exclusivity. Italy, renowned for its craftsmanship and design heritage, with companies such as Ferrari, Bugatti, and Dolce & Gabbana as flagships of Italian excellence, is home to several luxury bicycle and e-bicycle manufacturers specialising in high-end models. These companies leverage premium materials, innovative technology, and artisanal craftsmanship to create bespoke products that command premium prices. Strong pricing power and high margins are common characteristics of the industry, companies are able to pass on cost increases caused by wage inflation or raw material supply constraints directly to consumers without a material impact on margins.

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Image 6:  Price of e-bikes vs mechanical bikes 2018-2023.

The bicycle industry has experienced significant growth in recent years, fueled by increasing awareness of environmental issues, rising urbanisation, and a shift towards healthier lifestyles.

With a focus on customization and personalization, luxury bicycle and e-bicycle manufacturers differentiate themselves in a competitive market by offering unique riding experiences tailored to the preferences of affluent customers. As sustainability becomes an increasingly important consideration for consumers and states alike, luxury brands are also exploring eco-friendly materials and production methods to align with evolving consumer preferences and market trends. Such craftsmanship, the search for quality, and the increasing popularity of cycling since the pandemic have led to a steady price increase for new bikes and e-bikes sold in European markets. The strong recent deal activity, as evidenced by KKR’s acquisition of Accel Group which took the company private and the sale of Pinarello by LVMH-backed private equity firm L Catterton, showcases the investor interest in the industry.

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