All across the world, people enjoy exercise, whether for leisure or health. This is no different in Russia, where fitness centers are a hot commodity at the moment—the fitness market grew 20% in 2018.
World Class is a broadly-known Russian chain that provides an upscale experience, with memberships that can set members back a cool $1000 per year.
World Class is one of Russia’s oldest fitness chains. A retired fencer, Olga Slutsker, founded World Class after the break-up of the Soviet Union, in 1993, due to great frustrations with the quality of existing Russian fitness centers. She started with a $400,000 investment from her then-husband, the well-connected entrepreneur and politician Vladimir Slutsker. The venture was successful almost immediately, drawing in wealthy and famous patrons, despite what was then a $2500 membership fee.
World Class centers its business model on the luxury market, advertising that in every location it offers pools, various saunas, free wi-fi, beauty salons, and even “relax areas.”
These days, World Class is still heavily centered in Russia, but has also expanded to other countries like Kazakhstan, Kyrgyzstan, Belarus, and even Monaco. It has the most locations of any Russian fitness center, with 50 across Russia – 30 of those centered in Moscow. It holds a customer base of about 100,000. The company is looking to expand even more by maintaining its current position in Russia, franchising, and diversification. This includes both geographically and in their business models. In Moscow, they have launched “luxury” and “light” models, to offer even higher levels of luxury to those that want it and also slightly smaller locations that can help it capture additional market share. They might also try to expand into countries that don’t speak Russian.
This bright outlook has drawn international attention as well. Goldman Sachs, an American investment bank, now owns about half of the business in conjunction with a Russian bank. They like that it has a loyal customer base and diversifies their holdings. World Class revenues increased 9.1% in 2017.
World Class is working in a highly fractured market, however. 80% is taken by independent businesses (sole proprietorships). The remaining 20% is taken by major fitness clubs like Sport Land and Planeta Fitness.
Internet ad for World Class fitness.