According to http://news.asiaone.com ,Fitness First Asia and Celebrity Fitness have merged to be known as Evolution Wellness, the two health clubs said in a joint statement today (Feb 23).
Well , both company was competing for the past few years, why suddenly they merge together??? Is like Ferrari N.V. merge with Automobili Lamborghini S.p.A. Near to impossible. As we all know, gym are like mushroom growing after rain,all over the places.From cheaplak RM5 gym ,high class commercial gym like fitness first and celebrity fitness to niche market fitness studio such as activ studio and fly cycle.
Is good to see gym are everywhere, but if you look hard into it, alot of gyms are struggling and some of them are closing up as well.So what is the real reason of the merge between this 2 giants fitness chain?
As reported in https://www.fitnessfirst.co.id
- Martin Darby, CEO, Celebrity Fitness, said: “Celebrity Fitness and Fitness First complement each other in their distinctive brand identities and market positioning. This merger will enable both brands to expand faster and move into new Asian countries. I look forward to assisting Evolution Wellness with this strategic expansion.”
- STRONG FINANCIAL SUPPORT HIGHLIGHTS CONFIDENCE IN THE MERGER AND BRANDS Oaktree and Navis will own an equal share in Evolution Wellness, highlighting their support and confidence in the combined entity and growth prospects for the Asian health and fitness sector.
- Nicholas Bloy, Managing Partner, Navis, remarked: “Celebrity Fitness has been a great success story since our acquisition in 2007 of the brand created by John Franklin. At the same time we have watched with admiration, the growth and success of Fitness First in the region. We’re excited to be taking the lead role in this new entity and will bring our sector knowledge and years of regional expertise to help Evolution Wellness develop and grow in new and dynamic ways to reach its fullest potential. We see tremendous opportunity in the health and fitness market in Asia, and with this merger, we have established a strong platform on which to build our ambition and enhance our market leadership position.”
- Justin Bickle, Managing Director, Oaktree, and Fitness First Board member, remarked: “We’ve invested heavily into the Fitness First business, especially here in Asia, and have been delighted with the market response to our investments in club design and innovation. We’re looking forward to this next chapter of growth for Fitness First in Asia alongside that of Celebrity Fitness; we’re excited to partner with Navis to create a leading Asian fitness offering for the benefit of our combined customers.”
- Flint concluded, “Although we are now one of the largest fitness club networks in Asia, our priority remains to be true partners to our members in their fitness journey, and keep them coming back for more. We’ve worked hard over the last fifteen years to build a reputation based on trust, and we remain committed to bringing health and wellness to thousands more people across the region.”
Let’s look at some of the possible reason why NORMALLY 2 company will merge together.
- Gaining a competitive advantage or larger market share .
- Increasing capabilities.
- Diversifying products or services
- Replacing leadership: In a private company, the company may need to merge or be acquired if the current owners can’t identify someone within the company to succeed them. The owners may also wish to cash out to invest their money in something else, such as retirement!
- Cutting costs: When two companies have similar products or services, combining can create a large opportunity to reduce costs. When companies merge, frequently they have an opportunity to combine locations or reduce operating costs by integrating and streamlining support functions.(If you dint not see some of the staff in anymore………….)This economic strategy has to do with economies of scale: When the total cost of production of services or products is lowered as the volume increases, the company therefore maximizes total profits.
Surviving: It’s never easy for a company to willingly give up its identity to another company, but sometimes it is the only option in order for the company to survive. A number of companies used mergers and acquisitions to grow and survive during the global financial crisis from 2008 to 2012.
During the financial crisis, many banks merged in order to deleverage failing balance sheets that otherwise may have put them out of business. (Well, i do not think company will announce this to the public during merge.)
So what do you think is the real reason of the merge of Celebrity Fitness And Fitness First?Comment below: