This is one of the scariest blog posts I think I’ll ever write.
It’s about what is happening in the gym industry in Finland and the Nordics, in relation to the COVID-19 situation (1 – see links at the end of the post).
I see three options.
First, I might be a complete idiot.
Second, all gyms, big and small, local and multinational are struggling like crazy and the small ones need support.
Third, big players are making some brutal business moves to take over everything.
THE FIRST OPTION
The first option is definitely possible, as I’ve bankrupted a business before and I moved from Australia’s awesome weather to a cold country like Finland.
However, I feel like I can talk about this topic because at SPU we have been doing pretty well despite the lockdown situation. We’ve been able to follow the government guidelines, keep our gyms closed and still serve our clients to the fullest (minus the gym itself, of course).
So let’s focus on the two other options for now, because as a CEO and founder of a coaching/gym business myself I can’t make sense of the situation otherwise.
THE SECOND OPTION
So we are not struggling, but everyone else might be.
What I found surprising is that as of 22nd of April we are (as far as I know) the last gym chain to not have announced an opening date (2).
We are prepared to go on for months like this, but I know that many small gyms are not (3). The situation is severe.
So the thing that surprised me was that even the biggest gym chains decided open.
Especially at the expected peak of the COVID-infections.
If I was a CEO of a struggling big chain gym, I would definitely consider opening, even if the peak of the epidemic was about to come.
The future of the company, my duty to the shareholders, and to the employees would be constantly on my mind, even if I knew that this risks more infections.
If this is the case, and I was running a public company, I would definitely let my shareholders know that the situation is not great and we are forced to open, or otherwise, we go bankrupt.
But, I’m not sure if this would be the only option.
THE THIRD OPTION
This is the option where my CEO-senses start to tingle. And I mean the brutal, business and profit-oriented side of being a CEO. (Yes, I’ve never met a CEO who didn’t also have this side, even if they are also very compassionate and kind).
So If I was running the market leader in the gym business, with multinational, multi-billion backing and I was not struggling financially, this idea could pop into my head:
I could open my gyms right around the peak of the epidemic, in hopes that this would force the government to close down all gyms due to increased infections.
This could bankrupt basically all of the small and middle-sized gyms and leave the market completely in my hands. We have already seen that the gym industry has been struggling for years and the gym chain Fressi has even said that they’d go bankrupt if they were forced to close.
Now, you might be thinking that “wouldn’t the government help the small gyms”? Possibly, but for example, the restaurant industry is still waiting for anything else than a 2000€ single payment for entrepreneurs.
…for anyone not in the gym business, 2000€ might cover a quarter of a months rent. So that’s not a big help.
Going for a monopoly position is a dream for big businesses and when billions are on the table, I think it would be naive to think that someone wouldn’t be at least thinking about the possibility.
BACK TO REALITY
If I think about SPU’s current situation, we are set up pretty well.
If the second option happens, I know we will survive.
If the third option happens, we might either lose or benefit. Lose, if there was a big player who could undercut us completely in the high-end service range. Benefit, if there would be no competition for us after a domino of bankruptcies.
But this is what I personally feel is the most important thing, forgetting about all speculations:
I’m a meathead, our whole team is a bunch of gym rats and we love small gyms who care about hard training and results.
I have a membership currently to another gym, even though they are closed.
So here is my wish for anyone reading this.
If gyms are forced to close, please don’t cancel your membership to your local gym.
I wouldn’t want to see all the awesome Crossfit, bodybuilding, martial art and powerlifting gyms go down because a couple of months of tougher times.
As said, I might be imagining things, as I’ve been living a pretty quarantined life myself for the past weeks.
But if you take one message out of this blog post, it is this:
Please support the local private facilities if you can, so everyone can have their beloved gyms at the end of this epidemic.
Thanks for reading.
-Aaron Selkrig, CEO and founder of Selkrig Performance Unit
P.S. Here are some relevant links:
(1) THL’s situation page here:
(3) Kauppalehti writing about the gym industry struggles: