SOUTH AFRICA – Virgin Active, one of the largest global fitness brands, has received green light from the Competition Tribunal to merge its South African operations with healthy eating fast-food chains, Kauai and Nü.
The merger includes Kauai Juice, Kauai Smart Meals, and Nu Health Café, acquired from Real Foods for an estimated US$37.9m.
“The Tribunal has concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market in South Africa. Furthermore, the proposed transaction raises no public interest concerns,” it said.
The Virgin Active Group operates health clubs, offering a range of fitness and wellness services through the Virgin Active brand.
The target firms provide healthy food and beverage offering through medium and large retail stores, as well as inside 108 Virgin Active gyms since 2005.
The acquisition will provide the fitness company with significant additional customer touch points, cross incentives and, importantly, data and customer offerings.
The combination will also enhance the member experience and help deliver a holistic wellness experience to the Virgin Active community.
Virgin Active South Africa, partially owned by Brait, is reportedly to have started showcasing good traction on membership recovery following a lift in Covid restrictions around capacity, in line with lockdown regulations in February of 2022.
Since the relaxation of Coronavirus restrictions and the removal of capacity restraints in Q1 2022, Virgin Active South Africa said its sales have recovered to levels similar to 2019 levels with active members growing from 497,000 at the end of December 2021 to 557,000 in May.
Membership engagement and usage levels continue to improve and termination levels have fallen, comparing favourably to 2019 levels, said holding company Brait in announcing financial results for the year ended March 2022.
Along with the Kauai acquisition, the group said it will expand its predominantly bricks & mortar offering into digital, and will also invest in the member experience. It will also implement a flexible pricing model, although details of this are yet to be released.
Meanwhile, Virgin Active has appointed Dean Kowarski, proprietor of Real Foods to be its new CEO.
Dean has had a close association with the Virgin Active business for many years and has an in-depth understanding and passion for the health and wellness space.
He took over as the CEO on 4 March 2022, replacing Matthew Bucknall, who is retired in June 2022 after 25 years at Virgin Active.