Premium Pay as you Go fitness studio running classes and serving healthy food and smoothies.
Core Collective is setting a new standard in boutique fitness. Bookings at our first studio have risen, and we are currently taking over 2,000 bookings per week. We also have an average revenue of £130,000+ per month since April. *
We strip back the fads to provide clients with effective, honest and intelligent methods that value their time, lifestyle and goals – all within a relaxed, luxury environment where you want to hangout not just workout.
We believe group classes are the future of training. They give the best value for money, create community and healthy motivation, and give a safe and knowledgeable environment to improve fitness. Our Level 3 qualified PTs provide the experience of a personal training session within our small group classes for a fraction of the price.
We don’t believe in locking clients into a membership unless they want it. We respect the need for flexibility and we want to be an adaptable component of people’s lives – not a chore – which is why we have created a series of dynamic pricing options.
*Source: unaudited management accounts
Until 2015 the fitness industry was stale and one dimensional. The trend was to lock clients into complicated contracts and provide either a gym floor where it’s easy to get lost and train incorrectly or classes that weren’t good enough. It was (and is still) saturated with fads and fitness trends that didn’t reflect what we wanted out of our training. And so our purpose was born:
1. To be Flexible and Inclusive: Offering pay as you go classes in a welcoming and open-minded environment.
2. Always Individual: Empowering our clients to train at their own pace towards their own goals.
3. Forever Curious: Integrating the best of fitness innovation without our clients having to worry about it.
4. Carefully Balanced: Creating an uncompromising design-led environment to encourage clients to make time for body and mind.
Core Collective is a lifestyle, not a trend.
Substantial accomplishments to date
Best newcomer 2015 (Tatler gym awards).
Most sociable studio 2016 (Tatler gym awards).
Best new boutique studio 2016 (Pure Package awards).
TimeOut London Best cafe in Kensington 2016.
Shortlisted for NLA architecture award 2016.
Selected as an exclusive Lululemon co-branding partner 2016.
We currently have 2,000+ bookings per week, with revenues continue to grow sharply, currently at £130k+ per month*. The first site has been steadily profitable over the past 6 months*, and expected to continue to be very successful over the next 12 months and beyond. We have over 18,000 clients registered to our database and have made an influential and innovative impact on social media with over 20k instagram followers which is steadily rising.
In March 2016 we opened the Core Kitchen which now accounts for approximately of 20% of revenue (average revenue monthly revenue of £32,000)*.
Source: unaudited management accounts
Core Collective generates the majority of its revenues through pay as you go sales of fitness classes, not requiring a membership. Sales are made directly as walk-in or through the Core Collective website or via the Class Pass platform. Additional revenues come from Core Kitchen, the on site café which sells fresh, simple and healthy meals, snacks as well as hot and cold beverages all prepared on the premises. A selection of exclusive Core Collective and Lululemon co-branded workout wear is sold on site.
Use of proceeds
The proceeds from this raise are going to be used to fund the development of an additional site in St John's Wood High Street (which has been secured via an agreement to lease) and for working capital. We expect that if the business is able to meet its targets, further expansion capital will be available through debt financing and positive cash flow.
Please note that the business currently has a director loan worth £86,000. None of the funds raised will be used to pay this debt.
Core Collective sits at the convergence of recent trends in fitness, nutrition and social behaviour driven by the millennial generation, who now represent the largest demographic segment in the UK. Fitness revenues from gyms in the UK have grown by over 5.4% to £4.3bn during 2015, while there has been a 37% increase in the number of boutique fitness studios during 2012-2015. We feel that this growth has been driven by consumers’ desire to have flexibility in spending decisions, and the ability to make spontaneous purchases, both of which are counter-intuitive to the concept of a committed gym membership. As highly active social media users, many millennial consumers tend to be social in their choice of fitness activities whether it be a spinning class, TRX, high intensity interval training, pilates, or yoga. Furthermore, many millennial consumers are very conscious about the foods they consume opting for fresh simple and healthy choices.
Characteristics of target market
We believe that these millennial consumers have shown a preference to make spontaneous purchase decisions and are therefore less likely to commit to long term gym memberships, preferring pay as you go models and using mobile technology to search for and book their fitness activities. As avid social media users, over 37% feel they are ‘missing’ something if not active on Facebook, Instagram or Twitter each day. Therefore, its not surprising that over 56% prefer to exercise in a social setting. Over 55% of millennial consumers ranked brands that stood for high quality as being the most authentic while 53% would rather spend money on experiences instead of possessions.
Core Collective has an in house marketing team which manages all aspects of increasing the brand reach, developing the strategy, and very focused on delivery. Brand values of Core Collective are aimed towards fulfilling the needs of consumers, with a large proportion of customers being female:
• Flexible – with numerous class times and ways to book customers can buy discounted packages of classes and use them when they want, or book through Class Pass subject to availability. Under 30’s and corporate users get discounted membership rates;
• Simple – the four main fitness classes on offer are simple enough for beginners yet designed to challenge the most experienced customer;
• Social - all classes have a social element, as does the design of Core Kitchen. ///
• Effective – recent data indicates that over 56% prefer to exerise in a social context, and we feel that socially based classes are more effective than traditional gym membership, and that working out with others pushes them to try harder.
Social Media Marketing is a central avenue of customer acquisition. We encourage customers and advocates to use hashtags such as #keepitcore #corekitchen and @coregyms the spread of the brand can achieve greater reach among its target audience. Core Collective also invests a significant amount of its own internal resource to posting informative content on Instagram about new trainers, food choices, and classes. These type of posts tap into the ‘aspirational’ aspects of sharing fashion, food, workout regimes, and healthy living.
Whilst there are dozens of boutique fitness studios in London, many have lower quality facilities and average trainers. Core Collective offers a premium, high quality product putting itself in competition among only a few others. Differentiating factors in Core Collective are the in-house ‘star’ trainers whose classes have high booking rates as well as the premium build quality of its studio, facilities, equipment and luxury amenities. Core Collective counts a number of celebrities and fitness influencers among its regular clientele.
Given recent trends towards healthy living and historical fitness industry performance, we believe that Core Collective will be resilient to economic downturns, benefiting from reduced competition for the leasing of prime sites on favourable terms. A number of prime, high-traffic sites have been identified in London.