STRONG-ARM TACTICS
Planet Fitness gets physical Virgin Active
PLANET Fitness, the country’s secondlargest gym operator, has accused rival Virgin Active of “bullying” and anti-competitive behaviour in preventing it from accessing sites for new gyms.
It is a case rich in irony, given that Richard Branson’s Virgin brand was built on taking on established companies as the gutsy challenger in industries from music to hotels and airlines.
Virgin’s motif has been to shake up industries as the outsider tackling entrenched operators and fighting the establishment.
But in South Africa, Virgin has been the biggest gym operator for well over a decade after it stepped in to bail out the Health & Racquet gyms after owner Leisurenet went bust.
Rory Sweetlove, MD at Planet Fitness, said it laid a complaint with the Competition Commission. “We haven’t had feedback yet. Until such time as we do, we don’t feel comfortable talking about it.”
Planet Fitness founder Manny Rivera said it was in the hands of the commission. “The matter is sub judice, but it is for anti-competitive behaviour.”
However, insiders say the case revolves around the claim that after Planet Fitness identifies sites Virgin Active allegedly approaches the landlords and pressures them not to lease them to its rival.
If the case is heard at the Competition Tribunal, it will provide rare insight into a cut-throat industry.
Recently, Virgin Active and Planet Fitness launched new “no-frills” gym facilities, while simultaneously launching new top-end gyms for the wealthy.
Virgin’s gym at the high-end Melrose Arch shopping precinct is being upgraded at a cost said to be R20-million. It has also launched a new premium club in Alice Lane in the commercial hub of Sandton. This Sandton club will open at the end of the month, and will be Virgin Active’s 108th in South Africa, catering for about 600 000 members.
Planet Fitness has 23 clubs and 160 000 members up from 125 000 two years ago.
Both companies plan to expand north of South Africa’s border into the continent.
There is no guarantee yet that the case will proceed to a hearing at the tribunal. The Competition Commission will investigate before deciding whether to prosecute.