Robin writes:
The competitive spirit can be life-changing, and it is this spirit that the latest podcast in our “Second Lives” series explores. In the podcast JONATHAN HOLLOW interviews JOHN TREHARNE, a serial entrepreneur who has built not one, but two enormously successful businesses. The most recent of these businesses, Gym Group, was begun by John from a single site when he was in his early 50s. Less than 20 years later, it has 231 branches all around the UK, and over 800,000 members.
John speaks in the interview about the origins of his entrepreneurial streak, from his racquet sports career in his early twenties. He played squash for England. He sees the parallels between winning in squash and his enduring will to build, succeed and motivate. But social and charitable concerns have also been woven throughout his career, and he has tried, as he tells Jonathan, not to be changed by wealth and success. He believes in staying close to your roots.
John’s career shows that enormous financial success can be achieved when starting something new, at a time when many people might start to think about winding down. It’s never too late to dream new dreams.
TEBI would like to thank the London-based financial planning firm Mulberry Bow for collaborating with us on this series.
As well as Spotify, you’ll find The TEBI Podcast on all the major podcast platforms, including Apple Podcasts, Listen Notes, PlayerFM and Podbean.
TRANSCRIPT
The transcript below has been lightly edited for clarity and length.
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Jonathan Hollow: Can you walk us through your squash and racquetball career?
John Treharne: It’s a long time ago, that was back in 1983! So I played squash for England in 1983; I was the British racquetball champion for three years. Around that time, squash and latterly racquetball had always been part of my life. My housemaster was not so happy that I seemed to spend most of my time on the squash court rather than studying. That was my interest in life.
Jonathan Hollow: And what do you remember as a highlight of your squash career? A dinner … or a trip …?
John Treharne: No one individual thing. I mean, I got to travel to South Africa to play in test matches. That was great fun. We won the European Championships in Sweden around that time. All of those were personal highlights.
I had the great experience of training for a number of years with Jonah Barrington, who was the world champion for seven years. That was a real experience.
Jonathan Hollow: Were there any times when you found it particularly hard and thought it might not be worth the effort?
John Treharne: Yes. I mean, squash is not like tennis or golf. It’s actually quite difficult to make a living out of it. I ended up committing about two years of my life, I suppose, to full time training: training six days a week as, inevitably, you have to do to succeed at that level. But it’s clear that you’re not going to earn lots of money from playing competitive squash.
But I was always keen to use what I’d learnt from the sport. And of course, it became the start of what I actually started doing – by buying existing squash clubs and converting them into what is today commonplace, health-club related facilities. So we reduced the number of squash courts – it was still a key part of the facility, but we added swimming pools, and gyms, and classes, and creche facilities, and beauty therapy areas, and so on; which has become more of a common feature in health clubs today.
Squash was always quite difficult to make work on its own. It’s a very predominantly male-dominated sport still and, as such, didn’t have the wide appeal that gyms and the health clubs tend to have.
Jonathan Hollow: How did you decide that it was time to move on, or move beyond squash as an important activity for you?
John Treharne: As ever, these things come totally out of the blue.
I happened to meet two members of the Coral family, who had set up the Coral Leisure Group. This ran everything from greyhound racing stadiums to hotels to Pontins. And they decided that they were going to set up a commercial squash division. So I got the opportunity to actually use two of my skills: my financial or accounting background; and also I was involved in running squash clubs, which obviously I personally enjoyed doing.
So that gave me the opportunity to actually earn a living from the sport.
Jonathan Hollow: You created and then sold a chain of health clubs in the decade up to 2001. And then in 2007 (I believe you were in your early fifties) you set up the first location of the Gym Group. So you built two major businesses from scratch. I’m really interested in what was going through your mind as you set off the second time around?
John Treharne: “Here we go again!”
To be honest, the low-cost gym sector was very different; and I suppose that’s what particularly excited me about it – that it wasn’t just replicating what I’d done before.
I suppose the other big spur for me was everybody told me it wouldn’t work! … “Nobody wanted to use a gym 24 hours a day. You couldn’t make any money only charging £10 a month, and nobody would want to join online ….” Well, 800,000 members later, I can tell you that they were completely wrong!
So, I think a lot of those things were a sort of personal stimulus to making it a success. The story was very similar. I mean, in 2007, I’m sure you remember the economic climate wasn’t very good then. It was very, very difficult to raise money from banks; and so, rather like previous business I’d set up, I ended up funding the first site myself and then secured private equity backing once you’d got something open that was successful and that people could, as they put it, “kick the tyres”, and actually understand the metrics and see it in operation.
And we were very fortunate to get backing from Bridges Ventures, who were great backers of the business. On two occasions, they broke their own investment rules to put more money into the business to allow us to expand further. As with the previous business, we ultimately ended up listing on the stock market. So we fully listed in 2015 – and we’ve been on the stock market since then.
Jonathan Hollow: What made Gym Group so different from all its competitors and ultimately so successful when it was launched in 2007?
John Treharne: Going back that far, I mean it was, really, groundbreaking at the time – largely because health clubs previously had been very expensive. The UK market at the time was the most expensive in in the world, and therefore was rather elitist.
That’s fundamentally the major difference: like most low cost businesses – low cost airlines like EasyJet or hotels like Premier Inn – the Gym Group is very much focused on similar environments. And it’s one of the reasons that gym works because, actually, you can stand on a treadmill in kit and it doesn’t really matter whether you’re a multi-millionaire with a Ferrari outside, or you’ve come on your bike and you’re on benefits.
And actually, as a business, because of its online nature – it’s actually more like EasyJet than it is like a lot of its competitors.
There were three key aspects to it. Value for money – so, back then, we were charging £9.99 a month, which was obviously amazingly good value compared with the rest of the market.
We were uniquely available to our customers 24/7, and that is still very much the core part of our business.
And all of our processes were online, so you can’t fill in a form, you’ve never been able to fill in a form. You join online, and everybody – about 94% of our members, actually – join away from the gym. On their laptop, or iPhone, or iPad – whatever suits them to use. So that was the key to the business at the start, and it is still very much the key today.
Jonathan Hollow: Tell us about its growth and also where it’s grown; because I think it’s grown in areas that, certainly back in the day, were a bit neglected by some of the other gym clubs.
John Treharne: Yes, the business was backed by Bridges Ventures, who are a sustainability fund set up by Sir Ronald Cohen from Apax. His philosophies were very different. So they invest in businesses that do good for the community, but at the same time can be profitable. So the Gym Group is a very key part of that. And Bridges have a social impact scorecard, which actually measures the impact that we have on the local community.
And also, they have a process whereby 50% of our sites have to be in areas of deprivation, so low income areas.
Actually, it is true today to say that – although Bridges are no longer investors in the business – 80 per cent of our sites meet that criteria. So the whole idea of the Gym Group was to appeal to a wider cross section of people, whether they’re multimillionaires, or they’re on benefits – and everything in between.
Jonathan Hollow: So just to unpick that: there was a happy coincidence between the business model that you thought would work, and the social purpose that the Bridges group wanted to follow?
John Treharne: That’s very much the case. Obviously, the business has moved on a lot since then. We have 230 gyms throughout the UK, we have about 800,000 members, and we are very much a national business. I mean, we have sites in Plymouth, we have sites in Norwich, we have sites in Brighton, we have sites in Edinburgh, Glasgow. Perth, etc. So we’re very much a nationwide business.
Jonathan Hollow: You trained as an accountant, but you have said that playing squash and racquetball was a much better preparation for business than your accountancy training. So I’m curious about why you said that.
John Treharne: I mean, obviously, the qualification in accountancy is extremely useful, and of course it helps because I can read a balance sheet and read a set of accounts; but my focus has always been – and not just with the Gym Group – has been very much focused in management, site finding, rolling out a chain of facilities.
And finance is only part of that requirement.
The connection with sport is, I think, a lot around what’s important in sport generally: being competitive, not giving up, not being prepared to be beaten … really vital, as we know in business, it’s not always fun all the time. You have good times and hard times. As a business and as a sector, we’ve obviously just been through Covid. That was no fun for anybody in that market, but the ability to come out the other side and recover is very important. So, I think those are a lot of the skills you learn from sport generally: teamwork, working together, focusing on – at the end of the day – winning.
Jonathan Hollow: I presume that, when you were playing competitively for England and so on, you were at a peak – or maybe the peak – of your fitness. And I’m interested in whether that has shaped your fitness habits for life, or whether you had to find new fitness habits for different ages of life.
John Treharne: I certainly don’t play squash anymore! Like a lot of people who’ve played at a high level of squash, I’ve ended up with some of the injuries that come with that. So, in the last few years, I’ve had a knee replacement and a hip replacement, which is fairly commonplace. So, certainly playing squash is no longer something I do. I mean, obviously I use our gyms on a regular basis. In addition, I’m also invested in the paddle tennis business, and I’m fortunate enough to have a place in Portugal where the family regularly partake in paddle tennis, which is the fastest growing racket sport in Europe. So, similar type of background, but I certainly – as I said – don’t play lots of squash anymore.
Jonathan Hollow: You’re very keen on encouraging people to become active through your gyms, but also through your involvements in a wider alliance.
John Treharne: Trying to introduce exercise and leisure to a wider cross section of people has always been a key driver for us. It’s a key part of the gym business, getting people to exercise more; and it’s very much focused on introducing, and making available, exercise that people in the past might not have been able to afford to do, and to be able to access good quality facilities – which are obviously open all day.
So I think that has always been a key part of the community value. I also sit on the board of UK Active, which is the governing body of both public and commercial sporting facilities in the UK; and I also sit on the board of Europe Active – that is a similar body involved in promoting health and exercise.
So it’s a very key part of our business, and it’s interesting: one of our management incentives is to reward our management for delivering more usage by our membership base. Because, as far as I’m concerned, that’s a key measure of success for us.
Jonathan Hollow: I suppose it’s… I’m putting words in your mouth here, so I might be wrong – but it’s not commercially in your interest to have people use your gyms more. It’s in your commercial interest to take their subscription and have the facilities less used! So, I think that’s quite commendable if that’s how you incentivise your managers.
John Treharne: That is a commonly held view that your ideal member is somebody who pays you and never uses your facilities. I’ve never been a believer in that because that person getting nothing out of their membership.
But also they’re most unlikely, long term, to stay. Because at some point they wonder, “Why am I playing this subscription on a monthly basis when I never use it?” So actually, the ideal member is somebody who’s using you a couple of times a week, because then you will be getting some sort of benefit from it. You’ll be feeling better.
We try to encourage people to exercise three or four times a week, but we do not in any way look down on people who do not exercise more than once or twice a week.
Jonathan Hollow: So I think we probably heard, in your discussion of your feelings around starting up a second time, your competitive streak. What do you think are the pros and cons of having that competitive streak running through you?
John Treharne: It can make you very impatient.
I suppose, like most entrepreneurs, when you are very driven to succeed – inevitably, you can be quite a difficult taskmaster.
I’ve had a series of extremely good chairmen who’d had huge amounts of experience in different businesses, who were invaluable in terms of – particularly in my early days – making me realise it wasn’t just about my passion. I needed a team around me that had the same passion, and brought different skill sets to the table that I didn’t have.
So I think it’s about understanding what your strengths and weaknesses are, not being afraid to admit you’re not fantastic at everything – nobody ever is … And probably one of the best bits of advice I have had has been to recruit the best possible people you can afford, but then empower them. Don’t try and control everything they do: accept that they are more capable and more knowledgeable than you are.
Jonathan Hollow: You’re clearly still very highly motivated by the evolution of the Gym Group. What kind of things still excite you about it when you get up in the morning?
John Treharne: Businesses need to evolve and change. And I suppose that is one of my biggest drivers: testing and trialling new things – things that we haven’t done before.
They don’t all work, of course, but introducing the ones that do to develop the business. So at the moment, we’re very focused on looking at: how do we drive secondary spend from our membership base? And that’s not just about profit. That’s also about providing a better service for them. So giving them services that enhance their membership.
I’ll give you a simple example. We introduced, prior to Covid, a premium membership. It’s only £5 a month more expensive, but it gives you access to other benefits like being able to use any gym in the country, being able to bring a friend with you, and access to other facilities. And about 35% of our membership base take out that additional benefit.
Jonathan Hollow: I think it was about ten years ago that you were involved in setting up a charity. Can you tell us who that was designed to help?
John Treharne: Yes, it’s a bereavement charity. It’s quite a small charity. It was of personal interest to me because I lost my wife to cancer when my three girls were very young, and there was very little help and support at that time. It’s been great to be involved in helping that charity grow, to be able to provide help and support people – obviously, not just related to cancer – but children who lose their parents for whatever reason it may be. Obviously, there’s a lot that one can do. We provide a lot of support to schools, helping children deal with what is obviously a very difficult period for them. It’s actually focused on helping the family. It is also helping the parents understand what the children are going through, how they can help and support them.
Jonathan Hollow: Do you think you will ever stop working? It’s hard to imagine it, but I suppose if you do, you’d have to find the kinds of things that would give you enough satisfaction to take the place of the thrill you get out of work.
John Treharne: I speak to a lot of people about this. I think it has got to be a personal thing. I think if you tried to make me do gardening and DIY for the rest of my days, I wouldn’t be here for very long!
I guess the simple answer to that question is “No”. I am very happy to do less. I mean, I’ve recently been brought back as chairman of the Gym Group; longer term, I’ll possibly stay on the board. I stepped down as CEO in 2019. But I’ve already started investing in other businesses. I’m a founder / shareholder of Castore, the clothing business. As I said earlier, I’ve also invested in a paddle tennis business, which is beginning to expand.
I suppose the big difference is I’m not doing it. We’re investing in people a lot younger than I am, but providing them with the help and support to help them to be successful.
I’m also keen, as I do, to spend more time with my family. I now have, it’s about to become seven grandchildren. So there’s a lot of involvement obviously with that as well.
Jonathan Hollow: You’ve obviously had to have pretty stringent business plans to get your funding. Have you had a life plan separate from business plans or have your business plans been your life plan?
John Treharne: I suppose my experience of life is it has that ability to take you down paths you weren’t expecting to go down. I’m sure my father had this vision of me qualifying as an accountant and producing people’s accounts and, you know, eventually getting a gold watch or whatever at the end of my career. That’s not where I’ve ended up!
Equally, if you’d asked me, at that time, was I likely to end up running a sort of multi-leisure business and starting up businesses: no, that wasn’t particularly what I was planning on doing. So, my feeling is life brings up all sorts of things for us to deal with. I was reading about Tina Turner today. She said: “It’s not about what comes up to hit you, it’s how you deal with it.”
Jonathan Hollow: You’re a client of Mulberry Bow. Why would someone who’s obviously so gifted with money and finance, and comfortable looking into the future, need the services of a firm like Mulberry Bow?
John Treharne: Quite simply, I made the comment about surrounding yourself with people who know what they’re doing and certainly know a lot more about it than you do. And that’s exactly how I see Mulberry Bow.
They have the skill sets and experience that I don’t have. Obviously, I know a certain amount about what they do, but that they’re specialists in what they do. And that’s why they provide such a good service, as far as I’m concerned. Because they’re helping me with an area that isn’t my specialty.
Jonathan Hollow: What’s the way you work with them? I’m interested in what it’s like to work with them.
John Treharne: Well, funnily enough, I’ve been on the phone with them this morning. They help with handling my investments, tax planning, preparations in terms of providing investment advice for the grandchildren, for the future. So, they’re providing me with that specialist advice about my future life – but not just mine, the family as a whole. And that’s something I don’t have the time to be fully focused on.
So that’s the service they provide. They don’t try to tell me exactly what to do, but they will certainly guide me and suggest things that I should be considering doing.
Jonathan Hollow: One of the possible perils of wealth is a gap opening up in friendships or social interaction with people who have a lot less. Have you come across this and, if so, how have you navigated it?
John Treharne: I’ve certainly come across it. I’ve also worked, in my early career, for a number of sons of successful fathers and seen the trials and tribulations that they’ve had where they’ve wanted to show that they could be a success in their own right.
Of course, it can create issues with people. Jealousies.
I think as a nation, as we know, English people can quite often be quite critical of people who are successful – even if their success comes from a lot of hard work.
I think the most important thing is: don’t change. Inevitably, you will change because you can afford to buy certain things other people don’t have. But I think as long as you’re not foisting that on people … And you can maintain friendships with people who’ve helped you through difficult periods in life.
I can’t say I have lots of school friends that I still keep in touch with, but there are half a dozen or so that I still keep in touch with today.
Jonathan Hollow: Finally John, just going back to your charity, could you tell us what it’s called? We’ll add a link so that, if people want to make a donation, they can do.
John Treharne: The charity is called Jigsaw Southeast. I mean, it’s a local charity. It predominantly deals with helping children in Sussex, Kent and Surrey; and the main headquarters are based in East Grinstead, which happens to be near where I live. It’s a great charity, they do a lot of good work and they’re totally dependent, as are all charities, on support and donations.
BUY ROBIN AND JONATHAN’S BOOK
How to Fund the Life You Want by TEBI founder Robin Powell and Jonathan Hollow is published by Bloomsbury. It was unanimously adjudged Work and Life Book of the Year at the Business Book Awards 2023. Although primarily aimed at a UK audience, it contains valuable lessons for readers everywhere.
Buy the book here on Amazon, or, if you prefer, here on bookshop.org.
ALSO IN THIS SERIES
HÉCTOR GARCÍA on the concept of ikigai, the importance of community support, and the wisdom from Japan that has fed into his new book
LISA GRANIK MW on a new life in wine, looking back on law, Stalin and a long relationship with the Caucasian country of Georgia
BRIAN PORTNOY on how to master the “evolutionary two-step” that keeps us fearing (and hoping) throughout our money lives
ALEX DAVIS on her journey from company director to Latin scholar
ANDREW HALLAM on learning from philanthropists, investors — and people everywhere — about what makes life worth living
Photo montage: squash racquet by Girl with red hat, sunset by Ivan Torres, both from Unsplash
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