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Not all of the most influential people in the fitness industry currently own fitness clubs. David Giampaolo, is one of those people. Born in 1958, Giampaolo has been considered by many as one of the most networked people in the United Kingdom. As a native of Florida, Giampaolo moved to London by way of Bally Total Fitness in 1987, and never turned back.
When I first heard of Giampaolo it was through his connection with Zumba Fitness — Inc. Magazine’s 2012 ‘Company of the Year’. Until recently he was also on the board for Fitness First, the world’s largest non-U.S. fitness chain, and also sits on the board of fitness and wellness provider GlobalFit.
Giampaolo assisted this month’s additional profile (pg. 29), Irina Razumova, in her connection to Mark Mastrov and Leonard Schlemm, the successful co-founders of 24 Hour Fitness. Giampaolo began his career as a fitness entrepreneur at the age of 16, and in 2002 became the CEO of Pi Capital, based in London, which is one of the most exclusive private-investment networks in the world.
As interesting of an individual Giampaolo has become, he didn’t start out this way. His father, of Italian descent, moved to Miami and attempted, like many immigrants, to launch a family business. According to Giampaolo, education was never a major focus. He started his first business of mowing lawns at the age of 16. By 1975 Giampaolo had dropped out of high school and progressed from mowing lawns to co-owning a 1,000-square-foot fitness facility called “The Gym.”
“I didn’t go into health clubs thinking ‘this is where I’m going to find fame and fortune,’” said Giampaolo. “I went there because I enjoyed it. I also went there because I came to the view that, the summers in Florida were so hot, and so humid, that having an outside job, like cutting grass, was too brutal. It was more to do with the harsh, stark reality, that the inclement weather of Florida, for three or four months out of the year, drove me indoors into the health club business — I never looked back.”
Giampaolo and a friend opened The Gym when he was 17. “It proved quite successful, on a very modest scale,” he said. “It was through that, that I actually kicked off the path to a proper fitness industry career.”
The success of The Gym hadn’t gone unnoticed by a couple of Giampaolo’s members, who saw a young entrepreneur striving to develop a larger vision, and decided to give him a shot at something bigger. Those particular members, a couple of successful doctors, started complaining about the lack of air conditioning. “They said, ‘why don’t you put some air conditioning in this dump,’” explained Giampaolo. His response, “give me the money and I’ll do it. They then told me I should open a ‘proper health club.’ I said, ‘give me the money and I’ll do it.’ Over the course of a week or two, they said ‘fine, how much do you need?’ This opportunity gave me the chance to go from this little barbell sweatshop, to one year later opening one of the first Nautilus clubs in South Florida.”
Over the next three years Giampaolo opened three Nautilus clubs in South Florida. As the clubs slowly became successful, the big-box clubs started to emerge in competing territories. Giampaolo, with his youthful desire to escape his home state, decided to slowly sell off his three clubs and pursue other avenues.
“Through hard work and a lot of luck, I was reasonably successful at a young age,” he said. “I really had never spent any time out of Florida. I grew up in quite a poor home and lived and worked locally. I wanted to travel and learn what was really going on in the fitness industry in other parts of the USA.”
After Giampaolo sold his clubs, he entered into equipment distribution. “I had the exclusive rights to Keiser equipment in nine states in the Southeast. That meant I traveled around, sold equipment in those states. It also meant I went to all the key health and fitness trade shows throughout the U.S. I started traveling and seeing the U.S. health club market, and what was then clear was that the big and important buyers of exercise equipment, when it came out — whether it was Nautilus, Keiser, Lifecycle or StairMaster — was the chains.
“So, I got to meet one of the co-founders of Bally … actually Chicago Health Clubs then. I ended up meeting Al Philips, the operator from Chicago, and Al offered me a job. He said, ‘why don’t you come and learn the business on a big scale, come up to Chicago?’”
For Giampaolo, at 21 years old, the move up to Chicago was huge. “I left South Florida, and all my creature comforts, and moved to Chicago. I knew nobody, and went in and started working in the health club business, again.
“The headquarters of Bally, being in Chicago, I got another lucky break,” he said. “They said to me after being in Chicago for three years, ‘listen, we are the number-one player in America by a long shot. We think there are global opportunities for this health and fitness movement, and we’d like to open up clubs in Japan and the United Kingdom. We need to find partners to do that.’”
Bally’s chose Giampaolo to be the company’s managing director in the U.K. “That was in 1987,” said Giampaolo. “I’ll never forget, because I arrived with two suitcases of clothes, knowing no one. There were virtually no health clubs in the U.K, so I was coming over to find sites, meet people, hire people, build clubs, etcetera. It was super exciting, but it was also scary moving to a country when you don’t know anyone.”
The move to the U.K. presented Giampaolo with a new set of struggles, outside the club. However, Giampaolo said he approached the situation, not as a “know-it-all,” but as a person willing to learn from the local culture and use his connections to help grow fitness. His ability to learn quickly allowed him to successfully open the first American-style health club outside of the U.S. “In 1988 the first health club opened,” he said. “There was nothing else like it.
The first Bally he opened in the U.K. was 40,000 square feet, had multiple types of equipment, a running track, an indoor 25 meter swimming pool and neon lights. “There was absolutely nothing like it,” said Giampaolo. “It was so successful, the late Princess Diana did the grand opening.”
After the grand opening, Giampaolo and the club were featured in the press for several weeks. “It was such a big phenomenon for this huge U.S. business concept to open up, and then have Princess Diana open up the club,” he said.
To contact Princess Diana, it took Giampaolo about 30 minutes to draft a letter. He sent the letter, by mail, to the Princess. “I assumed there was effectively zero chance of it happening. I remember, I sent off the letter, and didn’t think again about it. Approximately four weeks later I got a letter back, and you could tell from the envelope — it had a Buckingham Palace stamp on it — this is some sort of a courtesy response. I’ll never forget opening the letter, and it was written in really proper English, because I literally had to read it two or three times, to find out whether the letter was accepting my invitation, or to turn it down. After the second or third read of it, I realized it was her acceptance.
“I remember I got the post at 10 or 11 in the morning, and I remember the person I reported to in America was in Chicago, and I phoned him at five in the morning and said, ‘are you sitting down? You’re not going to believe this. Princess Diana has accepted to do the Royal Opening.’ It was just insane.
“If someone would have told me when I was 16 years old, pushing a lawn mower, cutting grass, that I was going to end up in London — even if they would have said Chicago, I wouldn’t have believed — but to end up in London, and over the course of 25 years, set up or co-founded a couple of very successful companies and then navigate my way from the fitness industry, to the private equity world, I would have said ‘you’re nuts.’ But, it happened, little by little. One of the greatest things about America is that it’s full of those stories. And I’m blessed that I’m one of those people who managed, with no education, and coming from a poor family, to have worked my way into something quite successful.”
Giampaolo was with Bally for about two and a half years in London. He never had an intention of leaving, but one day he received a phone call that told him that the work he was doing for three or four new locations, wouldn’t be happening. The phone call left him with two options, according to Bally. They told him that he could return to the U.S., which they recommended, or he could just sit it out and wait. “I decided to take the third option,” said Giampaolo. “That was to leave, raise some capital, and do it myself. As a young, single guy, 29 or 30 years old, I’m living in London, been there three years, I wasn’t going back. Having that hunger or ambition, to sit with one club for the next couple of years wasn’t going to happen either.”
After leaving Bally in 1990, Giampaolo was eventually successful in raising money from a few venture capital groups. He struggled with several “no’s” due to his lack of education and still being relatively young. However, he wouldn’t let his dream die. He said that he didn’t go through hundreds before he got his “yes,” but he went through, what he considered, enough. “Even though they acknowledged that I didn’t have this education and didn’t have a financial background, almost all of them did put a tick in the box because I was American. That worked for me, not against me, because they fundamentally knew the work ethic and passion of Americans.”
Once Giampaolo received his investment, he proceeded to open two locations. “I was building a third at the time that a different path took over,” he explained. “Because I was opening up these clubs in London, on a huge scale, and buying the best of the best equipment, I got approached by brands like Cybex and Reebok, asking if I would distribute their fitness products in the U.K. or Europe. That was very appealing, because, as opposed to owning one or two health clubs, I could sell to lots of them and travel all over Europe. That’s when I started a distribution company called Forza.”
Giampaolo ran Forza for several years before he decided to bring on a partner for some outside capital. “I found myself at one IHRSA show sitting next to Mark Mastrov in 1993 or 1994, and he was saying, ‘I heard you’re doing great things over there, what’s it like? I go over there all the time.’ I told him what I was up to, and in passing, told him I was going to bring in another partner. He said, ‘I’ll do it, I’d love to be your partner.’”
Mastrov and Leonard Schlemm ended up purchasing a minority stake in Giampaolo’s company; however they brought huge value with their contacts and involvement. Together the team kept growing the company until they sold out around 1998. “During that period of time, Mark had built 24 Hour into a huge business, so I became his partner in Europe,” said Giampaolo. “I was his partner in 24 Hour Fitness in Europe. We never called them 24 Hour Fitness’ because we bought businesses and kept them under the same name, but at one stage, 24 Hour Fitness owned over 100 health clubs in Europe.”
When 24 Hour Fitness decided to get out of health clubs in Europe, it presented Giampaolo with the chance to do something radically different. It was in 2002 that, with a few financial partners, he led a management buy-in to Pi Capital and became CEO.
“In 2005, Fitness First was for sale,” he said. “It was going to be a typical private equity auction. After speaking with several of the potential buyers, I decided to work with BC Partners, who are one of the world’s pre-eminent private equity firms. I remained very active on the board, and in the company, until its sale this year, to Oaktree Capital.”
As luck would have it, in 2010, Giampaolo, through an introduction, met Alberto Perlman, one of the founders of Zumba Fitness. Giampaolo had been tracking Zumba’s success for some time, and while very impressed, it was only after this meeting with Perlman that he realized that Zumba was on a path to become one of the largest and most successfully branded fitness and lifestyle companies in the world. Only a few months after this initial meeting, he got the opportunity to work with the three founders and join the board of Zumba.
He said he enjoys Zumba because it is a “very cool, clever and fun company”, and one that gives incredible health and fitness results to the tens of millions that participate in it, each and every week. At this point in his career, it has become an incredible company and platform to be a part of. As the CEO of Pi Capital, he is often presented with interesting ventures on a regular basis — however, “they rarely ever stack up to be anything even remotely as successful as Zumba.”
Giampaolo said that his work has been his life-long passion — never believing or using the term “Workaholic.” He credits his success to hard work, lots of luck, doing the ‘right thing’ and surrounding himself with others, from whom he could learn. “I have had the privilege of working with and learning from some of the industry ‘greats’ like, Mastrov, Augie Nieto, Don Wildman, Al Philips, Bahram Akradi and Mike Balfour, to name but a few,” said Giampaolo. Like many successful individuals, he keeps striving, but never truly knowing where the next opportunity may lie — keeping his eyes open and his ear to the ground, and now dancing to the beat!
By Tyler Montgomery