While its no-frills, low-cost offering may have some appeal, people might decide they can do without gym membership entirely and invest in a pair of running shoes or set of home weights instead.
The Gym Group has also attracted some criticism for changing its key performance indicators, so it is harder to work out how individual gyms are contributing to the bottom line.
AJ Bell’s Russ Mould said: “Non-property net debt jumped in 2022 from £44.1 million to £76.1 million to fund the remainder of a site roll-out programme and to buy three sites from Fitness First. With membership growth starting to slow and with the inflationary pressures the company is facing, The Gym Group is having to take a different approach.
“It is a sign of the company’s caution that it is now pledging to only fund new sites from its own cash flow and while such prudence is no bad thing it does mean investors will have to face up to a slower pace of growth.
“Whoever comes in to replace the departing CEO Richard Darwin will really have to flex their corporate muscles to help win the market over to the story once more.”