Transcript
Speaker: I'm Jonathan Hollow and welcome back to Second Lives, a series of 12 podcasts for the evidence -based investor looking into how later lives can take a fresh direction. I'm talking to 12 fascinating people who are either living out remarkable second lives or who are experts on money and meaning in later life.
Speaker: Some of the people I'm interviewing have traded a higher salary for roles in art or academia that I know are paying. But I wanted to ring the changes with a guest whose passion has led to substantial wealth. A serial entrepreneur who, since his early 50s, has built a publicly listed company worth hundreds of millions of pounds.
Speaker: John Trahan's life has been built on sport and leisure. He studied economics at University College London and, while there, played squash for England. He later became British racquetball champion for three years, earning a place in the Guinness Book of Records. Now in his late sixties, he holds a significant founder stake in the gym group.
Speaker: It has well over 200 premises all across the UK. In less than two decades, he has built gym group from one branch to hundreds with a low -price, high -tech model that has brought top -quality gym equipment into areas of the UK that had been previously ignored by higher -cost providers. As you will hear, it's not the first, but the second big business he has successfully created from scratch.
Speaker: But just before we roll this interview with John, I'd like to say a word about Mulberry Bowe. This podcast is brought to you in collaboration with them. They are a chartered financial planning boutique in the City of London that offers a highly personalized service to around 150 individuals and families. You will hear more about them later in this podcast.
Speaker: because my interviewee, John Trahan, himself uses them for research and guidance in connection with his personal and family wealth. For more information, just Google Mulberry Bow Wealth Planning or follow the links in the notes for this podcast. So now to John Trahan. Can you walk us through your squash and racquetball career? It's a long time ago.
Speaker: that was back in 1983. So I played squash for England in 1983. I was the British record ball champion for three years around that time. Squash and the latterly record ball 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 sort of interest in life. And what
Speaker: Do you remember as a highlight of your squash career, a dinner or a trip? No, no one individual. I mean, you know, 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 at the time. I had the great experience of training for a number of years with
Speaker: Jonah Barrington, who was the world champion for seven years. That was a real experience. Were there any times when you found it particularly hard and thought it might not be worth the effort? Yes. I mean, squash is not like tennis or golf. It's actually quite difficult to make a living out of it.
Speaker: 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. Albeit, I was always keen to
Speaker: is what I've 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
Speaker: what is today commonplace in terms of sort of more 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 crate facilities.
Speaker: 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 it 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.
Speaker: How did you decide that it was time to move on or move beyond squash as an important activity for you?
Speaker: I mean, 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, which obviously ran everything from Greyhound Racing stadiums to Centre Hotels to Pontins. And they decided that they were going to set up a commercial squash division.
Speaker: So I got the opportunity to actually use two of my skills, obviously my financial or accounting background, but also, you know, 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.
Speaker: 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. And 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. Here we go again.
Speaker: I mean, to be honest, the low cost gym sector was very different and I suppose that's what particularly excited me by 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.
Speaker: Nobody wanted to use a gym 24 hours a day. Nobody would, you couldn't make any money only charging 10 pounds 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 sort of personal sort of stimulus to making a success. The story was very similar.
Speaker: 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 I'd rather like the previous business I set up, I ended up funding the first site myself.
Speaker: 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 tires off, but actually sort of understand the metrics and see it in operation.
Speaker: 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.
Speaker: This is Jonathan Hollow, and you're listening to Second Lives. I'm interviewing John Trahan about the life of a serial entrepreneur. What made Jim Group so different from all its competitors and ultimately so successful when it was launched in 2007? Going back that far, I mean, it was really groundbreaking at the time.
Speaker: Largely because health clubs previously had been very expensive. I mean the UK market at the time was the most expensive in the world and therefore was rather elitist. That's fundamentally the major difference. Like most low -cost businesses, low -cost airlines like
Speaker: EasyJet or hotels like Premier Inn, the gym group is very much focused on a similar environment. It's one of the reasons the gym works because actually you can stand on the treadmill in kit and it doesn't really matter whether you're a multimillionaire with a Ferrari and an outside or you've come on your bike and you're on benefit.
Speaker: And actually as a business, because of its online nature, actually is 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.
Speaker: We were uniquely available to our customers 24 -7 and that is still very much the core part of our business.
Speaker: and all of our processes were online. So you can't fill in the form, you've never been able to fill in the form. You join online and everybody, about 94 % of our members actually join away from the gym, you know, 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.
Speaker: 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. Yes, the business was backed by Bridges Ventures who are a sustainability fund set up by Sir Ronald Cohen from APACTS and
Speaker: 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 sort of very key part of that. And Bridges have a social impact scorecard that actually measures the impact that we have on the local community. And also they have a process whereby
Speaker: 50 % of our sites have to be in areas of deprivation, so low -income areas. Actually, it is true today to say that, albeit, bridges are no longer investors in the business, 80 % of our sites still meet that criteria. So the whole idea of the gym group was to appeal
Speaker: to a wider cross -section of people, whether they're multi -millionaires or they're on benefit and everything in between. 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. That's very much the case. I mean, obviously the business has moved on a lot since then. I mean, we have
Speaker: 230 gyms throughout the UK. We have about 900 ,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.
Speaker: 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 how you said that. I mean obviously a qualification in accountancy is very extremely useful and of course it helps because I can read a balance sheet and
Speaker: 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, you know, 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.
Speaker: 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. I mean, 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.
Speaker: I think those are a lot of the sort of skills you learn from sport generally, teamwork, working together, focusing on, at the end of the day, winning.
Speaker: 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 have shaped your fitness habits for life or whether you've had to find new fitness habits for different ages of life. I certainly don't play squash anymore. Like a lot of people who've played at the high level of squash, I've ended up with some of the injuries that come with that.
Speaker: In the last few years, I've had a knee replacement and a hip replacement, which is fairly commonplace.
Speaker: Certainly playing squash is no longer something I do. I mean, obviously I use hard gyms on a regular basis. In addition, I'm also invested in the paddle tennis business. And I have fortunate enough to have a place in Portugal where the family regularly partake in paddle tennis, which
Speaker: is the fastest -growing racket sports in Europe. So, similar type of backgrounds, but I certainly, as I said, don't play lots of squash anymore. You're very keen on encouraging people to become active through your gyms, but also through your involvements in a wider alliance. Trying to introduce exercise and leisure,
Speaker: 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 is very much sort of focused in introducing and making available exercise, which people in the past might not be able to afford to do and to be able to access good quality facilities, which were obviously open all the day.
Speaker: So I think that has always been a key part of the sort of 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 very
Speaker: key part of our our business and it's interesting one of our management incentives is to reward our management from delivering more usage by our membership base because as far as I'm concerned that's a key measure of you know success for us. I suppose it's I'm putting words in your mouth here so I might be wrong but it it's not commercially in your interest to have people use your gyms more
Speaker: It's in your commercial interest to take their subscription and have the facilities less used. So, I mean, I think that's quite commendable if that's how you incentivise your managers. 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 is always, A, is getting nothing out of their membership.
Speaker: but also they're most unlikely long term to stay because at some point they decide 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 and encourage people to exercise three or four times a week.
Speaker: but we do not in any way look down on people who do not exercise more than once or twice a week.
Speaker: Now for a word from Mulberry Bowe, who have collaborated with us to develop this series. I spoke to Simon Bullock of Mulberry Bowe. Has he ever found that through a financial planning discussion, he has helped a client to surprise themself with new ideas about their priorities and purposes? Here's what he had to say. It does happen. Yes, I think sometimes it's a combination of a planning discussion and perhaps a big
Speaker: life event like retiring or getting married or perhaps a first child or grandchild being born. We introduce different perspectives and I guess that can lead to fresh approach. One example it brings to mind was a recent retired couple we worked with who you know they were living not just within their means but way below them and we felt they were missing out some experiences you know they loved to travel and over a sort of three to five year
Speaker: period, we sort of gently coaxed them to spend about double on their lifestyle, mostly on trips and experiences. And, you know, from our perspective, they seemed happier as a result. Fun enough, when they sent us a selfie of them enjoying a glass of bubbly on a business class flight, we sort of joked that perhaps we've been a bit too successful in our encouragement. But to be honest, it was just great to see. Thank you. That was Simon Bullock, the founder of Moulbury Bow.
Speaker: And now back to John Trahorn with his reflections on making a life out of business. 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? It can make you
Speaker: very impatient. I suppose like most entrepreneurs when you are very driven to succeed, inevitably you can be quite the difficult taskmaster. I've had a series of extremely good chairmen who'd had a huge amounts of experience in different businesses who were invaluable in terms of
Speaker: particularly in my earlier days, sort of 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 understanding what your strengths and weaknesses are, not being afraid to admit you're not fantastic at everything nobody ever is.
Speaker: 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, except that they are more capable and more knowledgeable than you are. 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?
Speaker: businesses need to evolve and change. And I suppose that is one of my biggest drivers is testing and trialing new things, things that we haven't done before. You know, 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
Speaker: You know, 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. And I'll give you a simple example. I mean, we introduced prior to COVID a premium membership. I mean, it's only five pounds a month more expensive.
Speaker: 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. I think it was about 10 years ago that you were involved in setting up a charity.
Speaker: Can you tell us who that was designed to help? Yes, I mean, it's a bereavement charity. It's got 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.
Speaker: It's been great to be involved in helping that charity grow, to be able to provide help and support for 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.
Speaker: 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. 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. I speak to a lot of people about this.
Speaker: I think it has got to be a personal thing. I think if you tried to make me do gardening and do your life the rest of my days, I wouldn't be here very long. I guess the simple answer to that question is no. I'm very happy to do less. I mean, I've recently been brought back as chairman of the gym group, but I guess longer term, I'll possibly stay on the board. But I stepped down as CEO in 2019.
Speaker: But I've already started investing in other businesses. I'm a founder, shareholder of Castel, the clothing business. As I said earlier, I've 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.
Speaker: but providing them with the help and support to help them be successful. I'm also keen, as I do, to spend more time with my family. I mean, I now have about to become seven grandchildren, so there's a lot of involvement, obviously, with that as well.
Speaker: This is Jonathan Hollow, and you're listening to Second Lives. I'm interviewing John Trahan, whose gym group reaches all across the UK to more than 900 ,000 customers. 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?
Speaker: I suppose my experience of life is that 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 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
Speaker: 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 deals up all sorts of things for us to deal with. I think as apparently Tina Turner I was reading today said, it's not about what comes up to hit you, it's how you deal with it.
Speaker: You're a client of Mulberry Bow. Why would someone who's obviously so gifted with money and finance and can look into the future need the services of a firm like Mulberry Bow? Quite simply, I made the comment about surrounding yourself
Speaker: 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 Marlbury Bowe. They have the skill sets and the experience that I don't have. Obviously I know a certain about
Speaker: amount about what they do but they're specialists in what they do and that that's why they provide such a good service as far as I'm concerned because they're helping me with an area that you know isn't my specialty. And what's the what's the way you work with them? I'm interested in what it's like to work with them. Well funny enough I've been on the phone with them this morning
Speaker: They help with handling my investments, tax planning, preparations, you know, in terms of providing investment advice, you know, 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, A, I don't know enough about and, you know, I don't have the time
Speaker: to be sort of fully focused on that. 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. 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?
Speaker: 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. The fact that was a real success wasn't actually what they were all about.
Speaker: Of course, it can create issues with people, jealousies. I mean, 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 change
Speaker: because you can afford possibly to buy certain things other people don't have. But I think as long as you, you know, you're not sort of foisting that on people. And I think it's, you know, it's important that you can maintain friendships with people who've helped you through difficult periods in life experiences that you've had. So I still, I can't say I have lots of school friends that I still keep in touch with, but there are
Speaker: half a dozen or so that I still keep in touch with today. I can't remember who made the comment, what was it about? Remember when you're on the way up, that when you're on the way down, look after those people. And I'm sure that's good advice. 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. The charity is called Jigsaw Southeast.
Speaker: 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.
Speaker: Well, thank you, John, for taking time from your busy schedule to tell us about the life of sport, business and the competitive spirit. If you've enjoyed this episode, please bookmark this podcast in your app so that you don't miss the next episode of Second Lives.
Speaker: And I'd like to thank again, Mulberry Bow, a chartered financial planning boutique in the city of London that has worked with us to develop this series. For more information, just Google Mulberry Bow Wealth Planning or follow the links in the notes for this podcast.
