Tenacious Irina Razumova

Irina Razumova talks about how Planet Fitness has survived and thrived during a troubled economy 

CBE: Please remind us how and why you got into the health club business.

Irina Razumova: After living in Sweden for many years, in 1989, I started a joint Soviet-Swedish venture in fitness. In 1990, we opened the first club under the World Class trademark in Leningrad, now St Petersburg. We opened three more clubs in Leningrad, and in 1993, the first in Moscow. I ran these clubs until 1997 when they were sold. It was a challenging time. The fitness industry was new. We could not trade in any foreign currency, and the purchase of equipment or any other imported goods was allowed only through government-owned foreign trade organisations, which was a complicated process. As a result, I spent much of my time acquiring what we needed for our clubs.

CBE: How did Planet Fitness come about?

IR: In addition to club management, I had been engaged in sport equipment distribution. Income from these sales helped finance our development in Russia. One of our main partners was the British company Forza Fitness, headed at that time by David Giampaolo. In 1996, David introduced me to Mark Mastrov and Leonard Schlemm at the IHRSA International Convention and Trade Show. We began to discuss opening a chain of affordable fitness clubs. We opened the first Planet Fitness facility in 1997.

CBE: The Russian economy suffered severe setbacks in 1998. How did you survive that?

IR: Yes, we were launching our first clubs at the height of the first serious recession in Russia. Most of our leases were denominated in US dollars, and all of our revenues were in rubles. By being very flexible, we were able to renegotiate many of our leases and make payroll—even as the ruble fell in value from six to the US dollar, to 28 to the dollar, in less than a month. Fortunately, the purchase of a membership was one way people could spend their savings wisely. Even as the ruble continued to deflate in value, people were still assured visits to the club for the next 12 months.

CBE: What are your day-to-day responsibilities at Planet Fitness right now?

IR: I serve as the chairman of the Board of Directors. However, my number one priority is to develop new projects and new clubs. In addition, monitor employee training, and communicating with our team members. The result is a high level of service for our clients.

CBE: What is your target market?

IR: In Russia, there are business class, economy, and luxury clubs. However, we have declined such artificial classification. Our target market is people who want to live a healthy lifestyle regardless of age, physical condition or other factors.

CBE: Will you open more clubs in 2010? Will they be franchises or company-owned?

IR: Yes. We plan to open our third club in Kiev in the Ukraine. It will be a 3,700m2 company-owned club, offering a favourable location, a variety of fitness programmes in the gyms and in the swimming pool, and a range of other services.

CBE: What is the state of the Russian economy now? What is the outlook? How has the economy affected your business?

IR: While the recession is over, there is no steady economic growth yet. Forecasts for the next few years are optimistic, though many analysts predict that the economy will progress slowly. Most of the major players in the industry overcame the recession and stayed on the course. However, some smaller players went bankrupt. Others abandoned plans for further development due to the high bank charges for loans—from 12% to 35% depending on the type of loan. As for Planet Fitness, I think the setbacks we have seen have tested our strength and motivated us to become better. Russians have become more careful in matters concerning their family budgeting; consequently the choice of the fitness club has become a matter of careful consideration. We are striving to understand new trends and better meet the needs of our members.

CBE: Your clubs range in size from 520m2 to 9,000m2. Please describe what they offer.

IR: Each is unique in that it designed for the people who live in the area. All of our clubs have group exercise studios and one or more gyms with equipment for strength training and flexibility. Nearly all offer additional services, such as a solarium, massage and a fitness bar. We have activities for kids in the gym, the pool, the aerobics room, and in the children’s playroom, in order to encourage their full development. We also have two brands in the field of beauty—Beauty Planet beauty salons and Oriental Express spas, which operate at our clubs.

CBE: Please tell us about the group exercise classes that you offer.

IR: We offer about 150 different group exercise classes, which include power training, dance, mind and body, aqua-aerobics, and of course, classes for children. We track new fitness trends worldwide, adjust them for the Russian consumer, and include them on our group-classes schedule. We have a team of 350 professional instructors, many of whom are the best in Europe. They often win international contests. For example, in January, one of our instructors won the first prize in the “Election du Meilleur Espoir Leaderfit Event 2010” held in Paris.

CBE: How many employees do you have? How do you train them and keep them up to date on fitness trends?

IR: Today we have about 5,000 employees, and we spare no expense for training. All of our instructors and personal trainers must upgrade their skills at our own Fitness Academy, which we founded in 1998. In 2009, we held 155 workshops and master classes for more than 1,300 attendees. The Academy also held 56 other fitness events all over the country.

CBE: How do Russians view fitness? Are many physically active? What are the opportunities in the Russian fitness industry right now?

IR: Statistics in 2009 show that only 3-4% of Russians regularly practice fitness. The rest prefer other activities or lead a sedentary life. Only wide promotion of healthy lifestyles by the government will change that. The industry is still in the formative stage and there is much room for expansion. In the near future, I see consolidation. Some players will leave the market and strong chains will prevail. The task now is to open clubs within reasonable walking distance for people. Right now, there are not enough clubs of reasonable quality and price in close vicinity to the home or office. We have started to open some, but there is a big opportunity here. Also, the main tool fitness companies used to attract members is price. However, it is hard for members to know what they’ll get for a price. In my view, the measure of quality is if members feel good, work out with enthusiasm, and meet their goals. Then, members get value for money.

CBE: Finally, what kind of fitness programme do you enjoy?

IR: I like to try everything; I love new programmes. I enjoy power training, rather than dance. My latest hobby is boxing. Perhaps that is why I have lasted so long in this business.