Boxing is Life
Message from FightClub SA
Thank you champ!
From about Feb 2023 I have had the feeling that 2023 is going to have teeth and bite.
I visited New York in Feb 2020 to understand their boxing gyms, how they operate and how we could improve our offering. In real terms I was pretty surprised the higher end Boxing Gyms spend close to $2m on setting up each their gyms but they also charge about $80 per class. There was a lot to bring back and I believed a few minor changes would really bring our gyms to world class.
Then came March 2020, we were told we need to close with a re-opening date end of April which never materialised. We eventually re-opened end of August 2020 with our memberships reducing by 40% overnight. While we were closed I believed the market was going to change and looked at reducing our fees, this was manageable by including a 24 month option at a rate the market would not be able to compete with. Looking back at what transpired it has been a phenomenal move with no other facility able to compete with our pricing or offering, but it did make our recovery pretty slow. For most of 2021 we absorbed losses of approx. R300k per month while we waited for the growth for these new packages to take effect. We did this without electing to retrench trainers or remove any offering we had before Covid.
By end of October 2022 we managed to recover lost turnover to pre Covid numbers and looked set to be able to continue the growth we had created prior to Covid. Eskom had different ideas. October 2022 saw an increase of loadshedding to between stage 4 and 6 which lasted until mid 2023. I am unsure if anyone understands the effects of this on SME’s. Expenses overnight increased with about 15-20%, this is not a growth expense but additional costs just to service existing clients. To put this into perspective just Kyalami Corner was charging us R50 000 per month additional for Diesel to run the generators during the day and night. Even at 2am when everyone was closed. Major retailers like pick and pay who was spending R60m per month on diesel and generators implemented price increases allowing consumers to absorb additional costs when smaller businesses took the economic effects of this on their own income. We are not complaining about this merely shedding light the fate of small businesses. If you view the above in conjunction with my statement on 40% lost revenue and you further increased our rental expenses for the 3 years since covid it might dawn on you that even though we had recouped our pre Covid income our expenses had increased with about 30% since covid and an additional 20% from loadshedding. Its been a lot of fun learning to manage a business under these circumstances, whomever said if you can make it in New York you can make it anywhere needs to come here.
Noble our landlord from Dainfern approached me in April 2023 and asked me to relocate Kyalami FC to Crowthorne. The offering from new landlords seemed to blow away anything existing landlord’s were prepared to put on the table for our lease renewals. I don’t seem to understand the reasoning as most of them will struggle to find replacements and will have vacancies which end up doing a lot more damage to their bottom lines than looking after tenants that have been with you for very long periods.
We ended up relocating 4 of our clubs and in the process created a new FightClub look and feel. I total the relocation reduced our rental expenses to pre covid levels and I believe put FightClub on top of the hill that Covid and loadshedding put in from of SME’s.
We are about to start revamping our clubs that did not relocate and am busy creating value adds to our gyms that will put your health and fitness leaps and bounds above what any other gym , boxing or regular would be able to offer. I think most of you would agree that if you are dedicated to attendance that Boxing completely changes how you look at fitness and that the format we offer our classes and sessions in does really remove the need for you to become a fitness coach just to be able to manage your own health and fitness.
We would like to thank you for your support over the past three years, how we navigated some of the challenges I am still not sure, I have seen a big number of smaller gyms close their doors and a few times I have felt that the challenges stacked in from of us wanted nothing but to close us too. I would further like to assure you that we are and have always been dedicated to build the strongest fitness brand in SA without the expenses or need for you to make fitness your life. Show up do your hour and spend your time and energy on all the other things that are important in your life.
I would like to remind you of our feedback buttons on the APP, if you feel everyone is not giving their all let us know we want to ensure your sessions are hard, make you sweat and a lot of fun.
For everyone facing challenges in your own businesses and life due to the above. Fight for it champ. If there is any way we can assist or alleviate some of the pressure let us know we have been and will continue to bend over backwards.