How Fitness World, led by president and CEO Chris Smith, came out on the other side of bankruptcy newly revived and poised for future growth.
Chris Smith’s career in fitness spans 27 years, during which time he’s served in essentially every role a gym can offer — from personal trainer and fitness manager to CEO and owner.
Smith joined the fitness industry after retiring from football, a sport he played in high school, college and for a short stint professionally at the arena level. He attributes not going to the National Football League to one reason: he wasn’t as coachable as he should have been.
“If I would have been more coachable, there’s a good chance I would have played successfully professionally,” recalled Smith. “It held me back in terms of scouts and everything else.”
When Smith decided to pursue a career in the fitness industry full-time, he was determined to do things with a different attitude.
“When I got started in this industry, I really approached it with the mindset of, ‘I’m just going to do whatever I’m told,’” said Smith. “I’m going to learn and grow as fast as I can. That was my mentality, and it paid dividends for me early on in my career.”
Utilizing this mindset and soaking up mentorship from industry veterans such as Mark Mastrov and Jim Rowley, Smith quickly worked up the ranks at 24 Hour Fitness, where his fitness career began. He became a vice president of fitness for the national chain at just 30 years old.
The lessons learned and mentorship received early on in his career helped prepare Smith for what would ultimately be one of the biggest challenges he’d face: the COVID-19 pandemic. At the time, Smith was serving as CEO and president of SNFW Fitness BC, which included the Steve Nash Clubs as well as a couple other brands in Canada. The crisis ultimately led to the ownership group filing for bankruptcy.
Although Smith did not own the company, as the public face of the organization he took the brunt of the blame. He received negative texts, calls and even comments from the press, in addition to bearing the emotional burden of having to lay off 2,000 team members.
“During this time I did a lot of research and learned about 80% of CEOs who go through what I would call ‘traumatic adversity’ basically step away from executive management and never return to it,” said Smith. “I was determined to not be part of that statistic. I bought a couple of books, listened to podcasts and watched TED Talks on things I thought could keep me in the right headspace to go through what I was going through. I committed to keeping my own mental health and focus where it needed to be, so I could be the leader my team needed me to be.”
Through this process Smith came to a decision. Feeling the storied brand — which originated in 1959 — still had great potential, he decided to buy the company out of bankruptcy with a couple of partners.
Smith and his team then got to work relaunching the business — to be known moving forward as Fitness World — for the better, keeping what worked and culling what didn’t.
“It was about a fresh start,” said Smith. “We really took the time to talk to a lot of people and ask, ‘What should we do differently?’ We changed the business model — we operate much more in the high-value, low-price category now than any other category — but still have a very specific focus around member service and fitness. Even the way we pay people, the way we operate, our staffing and the classes we offer has changed. We reinvented the business based on feedback.”
Despite a couple more bumps in the road — such as a second round of closures of gyms nationwide in Canada, and therefore, a second round of layoffs for Fitness World — the brand’s turnaround has been a success. The company will have 17 locations by the end of November 2022, with more growth on the horizon.
Smith attributes this rebound to two key differentiators for the newly revived brand: its emphasis on high-quality fitness programming, and commitment to member service and retention.
Take programming, for example. With a background in personal training and sports, Smith truly believes in the power of personalized instruction. Therefore, programs such as personal and small group training, and Group X, are emphasized by the brand and team as an integral component to the member journey — not just an ancillary revenue driver.
“It’s part of our member onboarding,” said Smith. “We’re sending automated email campaigns asking members, ‘How can we get you involved?’ We’re asking, ‘Are we helping you get where you want to go?’ We’re not interested in just getting your dues and calling it a day. That’s not a sustainable business model. We are member-centric and goal-centric. We seek to help people accomplish their goals in the safest, fastest and most effective way possible.”
Because of this strategy, 25% of Fitness World’s members participate in programming of some kind, and the brand is averaging $65,000 per month per club through fitness alone.
Retention and member service are also key areas of focus for Fitness World. For example, general managers are accountable for retention at the club level and are incentivized accordingly.
“There’s a common phrase, ‘Work like you’re an owner,’” said Smith. “Our general managers are incentivized that way, meaning they are bonused based on goals, including those around retention. I think this instills a different level of pride, where they take a little more initiative to really provide that world-class experience to every single person coming through the door, and to understand why people cancel.”
As a result, Fitness World is averaging less than 3% attrition on a monthly basis. And Smith plans to drive that percentage even lower through a recent partnership with MXMetrics, a member survey tool that provides clubs with insights on the member experience and potential pain points.
“Now we’re getting a lot of even better data,” said Smith. “So, I’m looking to take an already low attrition number lower by understanding even more of the microcosms of the member experience and that member journey.”
Of course, programming and member service are just two factors contributing to Fitness World’s revival. Smith also credited his team consisting of dedicated and talented staff members on the front lines.
“As much as I get a lot of credit for what we’ve accomplished and what we’re doing, I have a team of people around me who are the real reason why we’re having the success we’re having,” said Smith. “I’m not out there doing all that work every single day, taking care of our members and being the forward-facing part of our business. It’s that team mentality that’s key.”
Looking toward the future, Smith is keeping an eye on three trends he believes are significant to not just Fitness World’s future success but the industry’s as a whole.
The first is the transformation of the fitness industry to the wellness industry. Consumers no longer prioritize just exercise but also recovery, mental health and overall well-being. Smith explained clubs are taking note, including Fitness World, with plans to incorporate more recovery and wellness services.
The second trend is the convergence of the medical and wellness communities, with Smith predicting down the road, doctors writing prescriptions to gyms will be a more common occurrence.
“The medical and fitness communities are continuing to get closer and closer together,” said Smith. “There are some gyms that have already bridged that gap completely and are taking medical prescriptions. When we look back 10 years from now, I think every club will be doing that in North America.”
The third trend, and potentially the most impactful, is the growing importance of political advocacy for gyms in North America. Smith sits on the board of IHRSA and is a member of the Fitness Industry Council of Canada (FIC).
Smith has seen firsthand the impact political advocacy can have. He pointed to recent wins by the FIC as an example.
On August 23, 2022, gym and fitness memberships were removed from a planned expansion of the provincial sales tax by the Government of Saskatchewan in Canada, thanks to lobbying efforts by the FIC.
According to Sara Hodson, the president of the FIC, this was achieved by rallying support from the fitness industry across the country — not just in the province of Saskatchewan.
“I was recently asked, ‘How did you get people outside of Saskatchewan to get behind this?’” said Hodson. “As the fitness industry, we have to give our heads a shake if we think this is a Saskatchewan issue, because this is a Canadian issue. If one government puts this tax forward, every province is at risk. So, we need to all fight for this as if it’s in our own backyard.”
For Smith, this is a lesson for the U.S. fitness industry. What becomes precedent in one state could easily be adopted by others.
Therefore, Smith encouraged operators to get involved in political advocacy as much as possible — locally, statewide and nationally — whether it’s through advocating to government officials directly or simply donating to IHRSA’s National Health & Fitness Alliance.
“We all are in this together from that standpoint,” said Smith. “Now, it’s less about getting government relief from the pandemic, and it’s more about making sure tax and legislation that negatively affect our industry don’t go through.”
Ultimately, Smith’s rallying cry is two simple words: do something.
“Get involved,” said Smith. “There are still way too many people who are sitting on their hands.”