Virgin Active closes three clubs in three months

The Citizen

18-06-2025

Closure in May sees the group exit Soweto completely …
No pain, no gain. The gym chain is catching up on overdue capex as it works to 'meet the minimum brand standards'. Picture: Virgin Active SA
Virgin Active is shutting three of its clubs across May, June and July. The first of these, the Jabulani RED club in Soweto, closed at the end of May. This closure means there are no longer any Virgin Active gyms in Soweto, following the Maponya Mall club's closure last year.
Its Southgate club was closed in 2019. It says that 'despite our best efforts and continued investment in the [Jabulani] facility, this model has unfortunately not resonated in the way we had hoped'.
The group has announced that the club at Boulders in Midrand will close at the end of June and that its Riverside club in Mbombela (Nelspruit) will shut at the end of July.
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Won't compromise on standards
Regarding the Boulders club, it says 'after proudly serving our members for over 15 years, the club has now reached a point where, even with extensive renovations, it would not be possible to meet the modern standards we hold ourselves to'.
'For this reason, we will be closing the club at the end of its current lease'.
It says it faces a similar situation in the capital of Mpumalanga: 'Having reached its 10-year milestone, the club is no longer able to meet the modern standards of design, innovation, and experience that our members have come to expect. Even with significant renovations, the site would not be able to deliver the future-forward Virgin Active experience we strive to offer, nor remain sustainable in the long term.'
Its other club in the city is located just 3.5km away.
At its peak, at the end of 2018, Virgin had 141 clubs in Southern Africa.
At the end of 2023 (the latest publicly available figure), this number had reduced to 132, according to the gym operator's owner Brait. It opened a string of clubs in the late 2010s, with the most recent being Table Bay Mall (Cape Town), Cornubia Mall (Durban), Kyalami Corner (Johannesburg) in 2017 and Loftus Park (Pretoria) in 2018.
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Virgin still recovering
Following the impact of the Covid-19 pandemic in 2020 and 2021, the group has taken a further two years to recover to what Brait calls 'maintainable' revenue levels. It has still not reached its stated 'maintainable' Ebitda (earnings before interest, tax, depreciation and amortisation) level, but ought to do so in the 2025 financial year.
Virgin Active has 634 000 members in southern Africa (as at September 2024), an increase of 5% from the 604 000 it had at the end of 2023.
It is catching up on 'overdue' capex in South Africa (and in the UK). It says this is necessary in both markets to 'meet the minimum brand standards'. Refurbs are currently underway at the Silo District (Collection) at the V&A Waterfront and Point club also in Cape Town, as well as the Bryanston and Glen Acres clubs in Gauteng.
The Point refurbishment is well overdue but was contingent on it winning an auction for the lease in 2023. It outbid a rival, and the new lease starts at R3.7 million per month, which is understood to be substantially more than it had been paying for the previous 23 years.
In April, Brait said Virgin Active was prioritising 'capital investment in the estate to enhance the member proposition'.
It added that the group 'has continued to trade positively since the beginning of the calendar year, with above budget membership growth in Italy and the UK offset by slightly less than budgeted growth in South Africa and Australia'.
Acquisitions, rollouts – and a boost
Brait acquired The Real Foods Group, the owner of Kauai and Nü in 2022, and has prioritised the rollout of these stores in clubs where they weren't yet present.
It received a major boost with the renewal of its contract with Discovery this year, which had previously been renewed in 2019.
Brait has been effectively winding down the business since 2020 by exiting its investments, under new management by Ethos.
It sold DGB and Iceland in 2020, Consol in 2022 and listed Premier Foods in March 2023, but retains a stake in the business (which it will sell down over time).
It is planning to sell its holding in New Look in the next 12 to 18 months and is looking to list or sell Virgin Active in 2026/27.
This article was republished from Moneyweb. Read the original here.