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Jun 11

Planet Fitness gets pumped up for IPO

Fitness Comments Off on Planet Fitness gets pumped up for IPO

The unconventional but fast-growing Planet Fitness gym chain is looking to hire bankers before going public, The Post has learned.

The Newington, NH, company, with more than 500 locations including 20 in the city offers some of the lowest membership fees in the sector, with plans costing up to only $20 a month, with no contracts and very limited service.

Company revenue was $157 million in 2012, according to an industry estimate.

The idea is to sign up a huge number of members 7,000 per location since they will come in only once a week as opposed to the twice a week average for more conventional gyms that offer superior service for much higher prices, industry consultant John Atwood said.

While offering decent equipment, it spends less than 25 percent of expenses on personnel, while competitors are paying more than 40 percent.

As a result, Planet Fitness has operating profit margins of about 25 percent. Atwood said the industry norm is around 10 percent.

The stagnant economy is pumping up the chain and its low-cost recipe.

Atwood said the question for underwriters is how sustainable the business model actually is.

Inc. magazine put Planet Fitness on its list of the 5,000 fastest-growing companies based on the gyms 216 percentage revenue growth from 2007 to 2010.

The chain has also gotten a marketing boost by being the featured gym on NBCs The Biggest Loser.

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Planet Fitness gets pumped up for IPO

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