Nachiket Kelkar
Moneycontrol.com
Health club operator Talwalkars Better Value Fitness has joined hands with UK's David Lloyd Leisure to expand into leisure and sports clubs in India.
The Talwalkars David Lloyd joint venture will for now offer consultancy services for leisure and sports clubs in residential complexes, gated townships and corporate campuses.
The company is also open to setting up and managing the clubs for third parties and has had discussions with several potential clients like builders, said Anant Gawande, CFO.
In the medium to long term, Talwalkars with David Lloyd does plan to open own clubs as well. David Lloyds operates 81 sports, health and leisure clubs in UK and 10 more across Europe. The clubs have facilities like gym, swimming pool, tennis and badminton courts, restaurants and cafes among other things. Case study: Marketing strategies to increase Talwalkar's presence
David Lloyds currently has over 4.4 lakh members and had revenue of USD 510 million in 2011.
Talwalkars operates 130 gyms across 68 cities in India, with an active member base of over 1.25 lakh. The company has seen strong growth despite some slowdown in discretionary spending by Indians, which Gawande feels is a sign that spending on health and fitness is not considered discretionary now.
The company was particularly surprised with strong membership renewal rate last quarter, he said.
Talwakars is expecting a 30-35 percent growth in net profit this financial year ending March 31, acccording to Gawande. Revenue is expected to grow around 30 percent, he added.
The Talwalkars David Lloyds JV, which will be a 100 percent subsidiary, should start contributing from first quarter next year. The JV firm plans to charge around 5-7.5 percent of project cost for its advisory services, while it will manage clubs on revenue share or fixed cost deals, Prashant Talwalkar, MD, Talwalkars said.
Losing 4%, Talwalkars is currently at Rs 188.50 on the BSE.
nachiket.kelkar@network18online.com
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