F45 was once the fastest-growing fitness empire in the world, but the struggling Australian-born gym chain now says it has a new winning strategy: shrink.
The cult gym’s new global boss says the wave of fitness studio closures and the recent catastrophic carnage on share prices are good and “strengthening our system.”
F45 CEO Tom Dowd, who was appointed in March this year to turn around the struggling training company, told Daily Mail Australia: “We are willing to shrink to grow.”
Mr Dowd – who plays golf with Mark Wahlberg and calls himself ‘Big Deal Dowd’ – was responding to a Daily Mail Australia report revealing the company’s largest franchisee, The Opulent Group, would close gyms in Sydney.
F45’s new global CEO Tom ‘Big Deal’ Dowd – an old golfing buddy of actor and investor Mark Wahlberg – says gym closures are actually a good thing
Actor Mark Wahlberg (left) with F45 founder Adam Gilchrist a year before the crash that led to Gilchrist leaving the company and his eventual replacement in March this year
“Closing unproductive locations to add value to existing studios strengthens our system,” he said in a statement.
‘An important aspect of our real estate strategy is to prevent oversaturation.
“We are focused and committed to supporting our franchise network – their operational success makes the entire system stronger.”
F45, which started with one gym in Sydney in 2012, grew to 1,555 studios and 2,801 franchises in 63 countries by mid-2021. The intention was to eventually have 23,000 studios worldwide.
Mark Wahlberg invested $450 million in the company and celebrated its IPO on the New York Stock Exchange (NYSE) together with Australian co-founder Adam Gilchrist in mid-2021.
That financial support placed Mr Gilchrist – who is not the famous cricketer of the same name – on the Australian Financial Review Rich List.
A year later, the “world’s fastest growing fitness company,” valued at more than $2 billion dollars, fell off a cliff.
In August 2022, the gym’s stock price fell from $17.28 to just $3. The stock has continued to fall, with shares trading for less than $1 since April.
Mr Gilchrist resigned as CEO last year amid the 82 percent fall in F45’s share price, which halved full-year revenue forecasts.
Mark Wahlberg and Tom Dowd, who call themselves “Big Deal Dowd” on Instagram, have been business partners for years
F45’s latest strategies include ‘Mark Wahlberg Weeks’ with special training sessions, which are free to non-F45 members
Who is the new F45 boss Tom Dowd?
Tom Dowd is a Pittsburgh-born entrepreneur who was Wahlberg’s partner in investment group MW/TD Inspired, Performance Inspired Nutrition and the Wahlburgers restaurant group.
Dowd was appointed after a $134 million debt facility was secured for F45 ‘to help the company reorganize its finances and combat the widespread closure of ailing gyms’.
Announcing the decision at the time, F45 Chairman Gene Davis said: “We are excited to bring Tom on board to help further refine F45’s forward-looking business strategy to deliver sustainable growth, expand opportunities for our franchisees and our team. increase and stimulate the long term. value for shareholders’.
Under Wahlberg’s term as brand manager, the company introduced ‘Wahlberg Week’, with seven days of free training for non-F45 members.
But last month the company announced it planned to delist from the New York Stock Exchange.
The delisting of the troubled fitness chain came after the share price remained below $1 for too long and the company failed to file its financial reports on time.
Opulent Group is going under
The Opulent Group has closed at least five gyms in Sydney, four in the southern suburbs of Kogarah, Kirrawee, Caringbah, Miranda and one in Balgowlah, on the northern beaches.
F45 OG started in 2015 and its website is full of inspiring statements about success, with the text: ‘Since when does greatness have a limit? Dream big. Greatness is infinite. Boundless. Never ending.’
It claims to ‘deliver world-class workouts’. It is going to be okay.’
The carnage at the cult-like celebrity gym F45 continues with the closure of five gyms in the largest global franchise, the Opulent Group, founded by (left to right) Daniel Capilli, Jordan McCreary and Joel Egan
However, former landlords of OG F45 gyms are owed money and employees claimed they were not paid their pensions for 12 months until they filed a complaint.
At some studios, the companies stopped paying rent and moved equipment before they were locked out, then sold it on Facebook Marketplace.
“Studios are closing and numbers are dropping quite rapidly at the moment,” said one former employee.
The Opulent Group was founded by Tasmanian private schoolboy and physiotherapist Jordan McCreary, friend Joel Egan and former Royal Australian Navy electronics technician Daniel Capilli.
F45 Opulent Group founders’ party with gym members aboard a boat in Sydney Harbor in 2019, when the franchise was riding high before the stock market massacre
F45 gyms are closing their doors, forcing franchisees to sell equipment on Facebook Marketplace and other online sites to recoup their investments
The success of the Opulent Group founders mirrored the journey of Adam Gilchrist, who used the money he made from F45 to build a property portfolio across Australia, including a Byron Bay trophy home now worth more than $20 million.
Mr Gilchrist, who left F45 with a $10 million payout, just half of the company’s remaining assets at the time, has since disappeared from view, although he was photographed flying back to Australia in July.
At least eight class actions have been filed in the US against F45 in connection with its IPO on the NYSE, alleging “possible violations of securities laws and/or breaches of fiduciary duties.”