Gold’s Gym International, Irving, TX, continued with its growth strategy last month as it acquired 11 Spectrum Athletic Clubs in San Antonio.
Gold’s declined to offer financial terms of the deal, but during the past two years, Gold’s has invested close to $75 million in acquisitions and club improvements, Gold’s Gym President Jim Snow tells Club Industry. The growth includes the Gold’s Gym Express model, of which seven corporate clubs are open, including the newest one just outside of Austin, TX. Snow says that 10 corporate express clubs are in the letter-of-intent stage and 25 franchise express clubs will close over the next 60 days.
“We’re making a lot of progress,” Snow says. “We really just turned the express [club] sales back on. We kind of turned it off for a little while so we could really wrap our hands around the express process. We feel like we’ve nailed it at this point. They’re performing at a very high level. We couldn’t be more excited about where it’s at right now.”
In addition to building new gyms, Gold’s is seeking to acquire small companies and groups of clubs, although Snow declined to give details on acquisition possibilities.
The Spectrum acquisition makes sense, Snow says, because the systems for both companies are similar and the two companies competed against each other in the San Antonio market.
“So everybody’s got a pretty good understanding of what each other’s gyms look like,” Snow says. “I think everybody’s going to be pretty satisfied with the turnover.”
The Spectrum clubs will be converted to Gold’s over the next 60 to 90 days as signage and branding are completed. Gold’s also plans to hire most of the associate base from Spectrum.
El Segundo, CA-based Spectrum Athletic Clubs, which is owned by private equity firm Brentwood Associates, Los Angeles, will continue to operate its 12 clubs in Southern California. The two companies did not discuss a sale of Spectrum’s Southern California clubs, Snow says, adding that Gold’s has no interest in those clubs at this time.
Spectrum CEO Bud Rockhill did not return messages seeking comment, but he did tell the Los Angeles Times last month that the San Antonio market was becoming saturated and had limited potential for growth.
“This transaction has only a positive impact on our clubs in California,” Rockhill told theTimes.
One source tells Club Industry that it makes sense for Gold’s to acquire the San Antonio Spectrum clubs, saying, “It’s a hand-in-glove fit for them. It’s a great opportunity for them to expand their brand in Texas where they’re very strong. Those are a really nice set of clubs there.”
With the addition of those 11 clubs, Gold’s now has 20 clubs in the Alamo city, making it the second-largest market for Gold’s behind the Washington, DC, area. Soon, Gold’s Gym will have a 21st club in San Antonio, Snow says, as the company recently signed a lease to build a 38,000-square-foot gym near Sea World San Antonio. The gym will have an outdoor pool and outdoor basketball courts, among other amenities.
With the completion of the Spectrum deal, Gold’s will have 75 corporate clubs. The company also has 400 franchise locations in the United States and 225 clubs outside the United States.
“We are on a growth path that we’re pretty darn excited about that we think will take us a long way over the next couple of years,” Snow says.