In an interview to CNBC-TV18, Anant Gawande, chief financial officer, Talwalkars, says the company is bringing in incentive scheme to encourage people to come to the gym regularly.
Speaking to CNBC-TV18, he says the occupancy rates are the highest in first 15 days of the year and most renewals too take place in the same month.
On the company's financials, Gawande is confident of logging same store sales growth (SSG) of 9 to 11 percent in Q3 and adds that the impact of acquisitions will be seen in the Q3 numbers.
Below is the verbatim transcript of Anant Gawande’s interview with Nigel D’Souza & Reema Tendulkar on CNBC-TV18.
Nigel: You have disclosed on the exchange is that you are looking to kick start 2016 with some new year’s offers. Could you tell us what is your target what is the offer, what kind of revenues can it bring and going ahead as well are you looking at more such offers?
A: Surprisingly January 1st to 15th our gyms are most occupied gyms within the year.
Reema: What happens after January 15th?
A: People start tapering down in terms of their criticality. One of the ideas which has coming to our mind recently is why not incentivise people to come repeatedly to gyms and on that basis hold an incentive structure which we are planning to start may be by March or April of this year. If you come more often and when you renew then at that time you get a lower rate for the next year. That is one thing by which you will be healthy and hopefully happy; because 70-80 percent people resolution revolve around how will I be happy and healthy in the near year. I think you will always be happy if you are healthy, that means all of that is true.
We really enjoy the fact that people make this resolution. We like to make them fit when they come to us. If not anything else make them feel happier because a good body and good mind is what you need.
Reema: December is generally a slack period for the gym industry considering many festivals that we have. How has it been this year? Is it better compared to last year? How would you compare it?
A: Actually what happens is November and December not just December are subdued months because we can only renew what we have as a base. We can’t renew what we don’t have. Most of the renewals take place in January. As January comes in then people come back for the renewal of their existing membership. We had a busy November–December because we have been, I am sure you know it because your channel has been carrying news about lot of acquisitions but that is in the non organic space.
In the organic space things do quiten down a bit in November–December and I dare say that yesterday or day before if I had met my friends I would not had discussed gymming, as much as I would have discussed good food. Today is the day to discuss gyms and health and sector.
Reema: That said even though Q3 that is October-November-December period is slack last year I remember you still clocked in revenues of nearly 8 percent. Your same store sales growth was still closed to about 9 percent so should we expect similar numbers, the growth rates that we saw last year in the same period like to like?
A: Let me answer you little differently, obviously I can’t give the detailed figure because of all statutory requirements but more importantly I think same store sales growth should not slack down. That is something which we are really focused on. Also I think there have been people who come in these months now to try and make good in a lean period a lower membership fee structure. Obviously, if somebody becomes a member of mine in November or December he may get a little higher discount then I would usually give because I want fresh customers to come in.
Third is you will see the impact of the company which we have acquired in the last quarter which is the September quarter in the December quarter for the first time because the consolidation impact will come in. So, overall on that basis growth should be decent. Giving a figure is not appropriate as you would agree but I think that won’t harm us but it is still not going to be a quarter like September or like march because there is always a low base. That low base you will still see growth but it is no that base if I have to be clear.
Nigel: Your same store sales growth you are saying that it will be maintained. You are targeting around 11 percent?
A: I have been clocking that between 9-and 11. Recently I did a road journey from Mumbai to Delhi by car and drove myself and you can really see a lot of traction in terms of what people are spending money in terms of towns and villages which I was passing through. So, I don’t think that is under any threat the same store sales growth. So, that we surely think is going to be achieved. Whether the various entities which we are merging with us in terms of consolidation add more to what we are doing is the factor we have to pull in by January 15.
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