Humphrey Cobbold: Boss of budget gym chain fitter for purpose after swapping suit for LycraComments Off on Humphrey Cobbold: Boss of budget gym chain fitter for purpose after swapping suit for Lycra
Humphrey Cobbold is getting used to a life in Lycra. After spending two decades pulling on a sharp suit, he has spent the last seven hopping on and off bikes being put through his paces by the likes of Tour de France hero Sir Bradley Wiggins.
“I wear a suit once in a blue moon — they just aren’t part of life in the sports industry,” says Cobbold, the chief executive of budget chain Pure Gym and formerly of online cycling retailer Wiggle. “I have now discovered that attaching a silk tie tightly around my neck does not help me think or act more effectively — strangely enough.”
He adds that his recent gigs have helped alter his fitness as well as his dress sense. “I realised the process of adding a pound every year since university could not go on forever. On my fifth day of my job at Wiggle, I found myself riding alongside Sir Bradley Wiggins in the New Forest. It was quite surreal.”
Now Cobbold, who cuts a trim figure, has put the signing-up of Britain’s wannabe gym bunnies at the heart of his 138-gym chain’s strategy. The company offers daily passes and monthly passes as well as 24-hour opening times to provide maximum flexibility.
He hopes knockdown prices (a pass is £18 a month) and the practice of not locking those who sign up with good intentions in January into annual contracts will appeal to the casual visitor. Opening round the clock has helped entice London’s army of shift workers and freelancers, from barmen to nurses, into training through the night.
“We’ve got long opening hours, great kit and the freedom and flexibility to use the gym when you want,” says Cobbold. “Whoever woke up in the morning and said ‘yes, I really want to buy a 12-month contract?’ ”
The strategy appears to be paying off. Accounts released today show revenues surged 82% to £125 million in 2015 with earnings up 46% to £28 million. The results will further fuel speculation of a City float this year, depending on market volatility following the Brexit referendum, and the company has already enlisted Rothschild to advise it on its options.
Since buying rival LA Fitness for £135 million, Pure Gym has increased its membership from 500,000 to 700,000, overtaking its more expensive rivals such as Fitness First and Virgin Active. The deal brought the chain’s London portfolio to 40, and Cobbold reckons the capital has room for more.
Pure Gym’s sites — even those in traditionally upmarket areas — are deliberately unfussy affairs with no pool or café. Cobbold likens the model for Pure Gym to budget beacons easyJet and Premier Inn. “You can get affordable, safe, high-quality flights with easyJet that even Kate Moss or David Cameron don’t mind using,” he says. “There’s no stigma attached to a low-cost airline, just as with Premier Inn you know what you’re getting.”
Pure Gym was founded by entrepreneur Peter Roberts and has been owned by private equity group CCMP Capital Advisors since 2013. Cobbold was approached to take the job last year, after the merger with LA Fitness had been inked, but was initially tentative.
“Peter is an extraordinary entrepreneur but, at 70 years old, he’s not as young as he used to be and was therefore looking for a chief executive to pick up the reins. At first, I didn’t see it appealing but then I discovered what a good business it is. It’s highly disruptive to normal operators who rely on higher prices and 12-month contracts.”
The job appears a snug fit for Cobbold, who was in the thick of his previous job running Wiggle when private equity owner Bridgepoint abruptly sent him packing in 2013. “I left because the owners decided they wanted to have someone else manage the asset for them — which is not that uncommon when one private equity house takes over from another. Actually, leaving Wiggle opened up a whole new set of opportunities and experiences that ultimately led to Pure Gym, about which I am totally passionate.”
Cobbold, who divides his time between Swiss Cottage, the business’s Leeds head office and the sleepy village of Russell’s Water near Henley-on-Thames, has plenty of experience in dealing with private equity.
The Cambridge graduate spent four years on the board of private equity group Candover Partners, having worked his way up through consultants McKinsey for 20 years and guided the strategy of Daily Mirror publisher Trinity Mirror.
He comes from a family not short on business achievements. His brother Tim is chief executive of media group UBM and his late uncle, Lord Robert Runcie, was Archbishop of Canterbury. John Cobbold, a member of his extended family, was Ipswich Town’s youngest-ever director and steered the club through its glory years under Sir Bobby Robson — who described him as “like a second father to me”.
His family is important to him and he is approaching his 25th wedding anniversary with his wife, Nicola, who he describes as a “feisty north Londoner” whom he met 30 years ago among the punts and cobbles of Cambridge. The pair have three children. Away from the grindstone, the South Africa-born businessman — who has lived in France and New Zealand — enjoys the odd night out and, yes, likes to exercise. In fact, he’s up against his son in a half ironman in Austria in September.
So what next for Pure Gym as Cobbold once again finds himself on the private equity treadmill of buy, build and sell? Private equity groups are always looking for an exit but the financial history of gyms is not an especially illustrious one. For example, Fitness First, one of the market leaders, narrowly avoided administration in 2012, though it has since got back on its feet.
“Traditionally, private equity groups start exploring their options the day after they acquire an asset but we’re focused on running a good business that generates profits, and at some stage they will sell us. But what they do isn’t predetermined,” says Cobbold, who as an investor will hope to benefit from a sale or float.
He himself is set in his mission to get us in shape: “I have a deep personal belief that getting people a little bit fitter, a little more active, a little bit more ‘out there’ rather than ‘in here’ will do individuals and society so much good.”