Sport Clubs aims to double number of branches, eyes franchising: CEO

Wael El Merhabi, CEO of Sport Clubs Company

Sport Clubs Company, which owns the Body Masters brand, holds now the second-largest market share in terms of revenue, operating a network of 56 branches across 17 cities in the Kingdom. It also serves over 125,000 active members, CEO Wael El Merhabi told Argaam in an interview.

Sport Clubs plans no less than 50 additional openings over the next five years, including 20 branches to be launched in 2025 and 2026 under the new identities of “Body Masters” and “Body Motions,” which have received a positive response from members.

The company does not join the price discount race in the market. It rather focuses on delivering high value and a comprehensive experience at affordable prices for the broader category of society.

El Merhabi pointed out that franchising is one of the strategic approaches the company will adopt to expand outside the Kingdom, aiming to open new growth prospects, enhance the brand, and maintain high operational standards.

The CEO spoke about the history of the fitness and bodybuilding market, the strategic transformation of Sport Clubs Company, and its financial performance. Here is the full interview:

*How was the fitness club market in Saudi Arabia when Sport Clubs launched operations more than 30 years ago? And what are the major market transformations?

- When Sport Clubs was launched in the early 1990s, the market was still an infant, with very limited options restricted to basic centers mainly focused on bodybuilding.

Over the years, the market has significantly evolved in terms of diversified offerings, increased consumer awareness, and the emergence of new club models targeting various society segments, including women and youth, up to those seeking luxury and holistic experiences.

*What factors have helped Sport Clubs maintain its position despite major market changes?

- The most important factor was our flexibility in adapting to changes and continuous investment in enhancing the in-club experience.

We have built long-term relationships with members through reliable services, clean and safe environments, and well-planned expansion in viable areas.

Additionally, we have focused on ongoing upgrades to equipment and training programs and developing qualified teams to enhance the overall experience.

*Was there a specific phase that you consider a major turning point in Sport Clubs’ history in terms of expansion, business model enhancement, or restructuring?

- Yes, we can say that 2019 marked the beginning of a strategic expansion phase as we adopted a new, advanced club model.

We achieved several milestones in the last five years, such as the launch of the “Body Motions” women’s clubs, followed by the “Body Experts” for comprehensive sports solutions, and most recently the new identity for “Body Masters.” This expansion allowed us to serve different segments more professionally.

Launching the new club identity and investing in and relying more on technology were among the pivotal steps that redefined our club experience.

*What are your expectations for growth in demand for fitness clubs? And what strategies are adopted by Sport Clubs to meet this demand?

- Overall, we expect continued uptick in demand, supported by Saudi Vision 2030, which prioritizes quality of life and promotes health awareness across all segments of society.

Our strategy focuses on thoughtful expansion, enhancing the digital experience, and emphasizing member loyalty and tailored programs. We believe success lies not only in increasing the number of members, but also in retaining them through exceptional experiences.

*How do you see the evolution of your market share in the coming years, especially with the accelerated expansion in the sector?

- Sport Clubs is a market leader, currently holding the second-largest market share by revenue, with 56 branches and 125,000 active members.

We will continue to maintain and grow this position through geographic expansion of “Body Masters” and “Body Motions” clubs, targeting underserved areas, and executing a renewal plan that includes existing clubs under the “Zad Quwwa” initiative, as well as private projects through “Body Experts” for comprehensive sports solutions.

*How many branches does Sport Clubs currently operate? And how many new branches are planned for 2025 and 2026?

- As of September 30, 2024, Sport Clubs operated 56 branches across 17 cities in the Kingdom. We eye no less than 50 additional branches over the next five years, including 20 during 2025 and 2026, under the new identities of “Body Masters” and “Body Motions,” which have received strong turnout by members.

*How do you evaluate the performance of your current branches? Do all branches generate operating profits?

- Most of our branches are performing well with continuous growth and are achieving solid operating results, especially the newly launches during the transformation phase. These clubs have achieved double-digit compound annual growth rate on revenue and profitability levels.

Normally, performance varies from one branch to another depending on geographic location, population density, and other factors.

We monitor performance regularly and take quick actions to support any branch needing operational or marketing improvements.

*How do you handle intense competition in subscription pricing, especially amid widespread discounting in the sector?

- We do not engage in price wars; instead, we focus on delivering high value at carefully studied and competitive prices accessible to the majority of the population.

With our management team’s extensive experience— most of whom have over ten years of experience within the company —we prepare a comprehensive annual promotional calendar that aligns offers with key seasons and member needs.

We also emphasize the concept of “perceived value,” ensuring that members feel the quality of service, convenience, and training experience is worth their payment—if not more.

*How has the company’s financial performance evolved over the past three years?

- The company has seen significant growth in revenue and operating profits, driven by thoughtful expansion, improved member experience, and stronger governance practices.

Our loyalty and customer retention programs, combined with attracting new members and investments in technology and innovation, have supported sustainable income in the fitness center sector. This has been further bolstered by the “Body Experts” sports solutions segment. The company has delivered strong growth in recent years and expects this to continue.

*Are you planning to expand Sport Clubs’ network through franchising? What is the impact expected on financial performance and market position?

- Yes, franchising is one of the strategic paths the company intends to take to expand outside the Kingdom.

We believe this step will open new growth opportunities and contribute to strengthening and spreading our brand while maintaining the high operational standards we adhere to.