On today’s episode, host Pete Moore sits down with Emma and Ben Stallworthy, the husband and wife team behind the Melbourne-based, Your Reformer. With a foundation built on serial entrepreneurship and a huge passion for Pilates, Emma and Ben share their story from reviving a rundown health club to scaling a successful chain of gyms, and ultimately selling their business to a major player.
They dive into the challenges of pivoting from brick-and-mortar to launching their own Pilates equipment and digital content venture, all while (trying!) to balance family life, married life, and staying true to their values. Listen now for some candid conversations about risk-taking, jumping on opportunities, and why they believe the future of wellness lies in making Pilates accessible anytime, anywhere, and for anyone.
On knowing your bottom line during negotiations, Emma states, "Make sure you're equipped with the right advisors around what is a realistic valuation that you can have some wiggle room in negotiation to move with. You should know, what's my bottom line, what would I walk away from, and what am I comfortable with? This way, you can then go in there and be comfortable with either decision and have no regrets."
Key themes discussed
- Building and scaling health clubs in Australia.
- Entrepreneurial journey and personal growth.
- Introducing reformer Pilates into gyms.
- Navigating acquisitions and business exits.
- Creating boutique wellness experiences within larger clubs.
- Transitioning to digital and at-home Pilates solutions.
- Balancing family life with business partnerships.
A few key takeaways:
1. Entrepreneurial Spirit and Diverse Ventures: The couple's journey highlights their strong entrepreneurial drive. From purchasing a rundown club at 22, to experimenting with other unusual businesses, they’ve shown a knack for identifying and chasing new opportunities. Their evolution to focusing on one “core thing” (Pilates, with Your Reformer) demonstrates the power of learning, adaptation, and focus.
2. Building, Growing, and Exiting a Fitness Chain: They took a failing gym, revamped it, and eventually scaled to six clubs (Pinnacle Health Clubs) by innovating early—like introducing 24/7 access before it became common. This alone doubled their membership! Their ability to consistently listen to member needs and adapt offerings was essential for sustained growth, culminating in a successful exit to Viva Leisure.
3. Pilates and Boutique Wellness as a Growth Engine: The pair recognized Pilates—specifically Reformer Pilates—as a critical differentiator and a driver of future growth. By integrating boutique wellness elements into their clubs, they expanded the appeal and unlocked additional revenue, with up to 30% of members opting in for premium wellness options.
4. Navigating the Acquisition Process: Emma and Ben shared valuable advice on selling a business: When a strategic buyer comes with an offer, don’t let personal attachment cloud your judgment! They stressed the importance of getting solid advice, knowing your worth, negotiating from a position of strength, and recognizing that the first offer is often the best. Detaching emotionally and staying commercially minded is crucial.
5. Transitioning to Product and Digital Solutions: After their exit, they transitioned from brick-and-mortar gyms to manufacturing reformer Pilates machines and digital solutions, supplying both commercial facilities and the home market. Your Reformer meets the needs of major gym chains to home users, making Pilates more accessible without breaching any non-compete. They’ve combined design, content, and hardware into user-focused solutions, leveraging insights from hands-on, member-facing experience.
Resources:
- Emma Stallworthy: https://www.linkedin.com/in/emma-stallworthy
- Ben Stallworthy: https://www.linkedin.com/in/ben-stallworthy-912625a1/
- Your Reformer: https://yourreformer.com/
- Prospect Wizard: https://www.theprospectwizard.com
- Promotion Vault: http://www.promotionvault.com
- HigherDose: http://www.higherdose.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
I am super excited to announce that we now have a formal
partnership with the Prospect Wizard. And when I say
wizard, I mean wizard. Obviously you have a website.
This allows you to convert your website traffic visitors
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(00:22):
voicemail immediately. Goes to you, your sales team or anyone else in the
club instantly. MIT shows a study that if you contact
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(00:44):
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It's easy to use. Go to the prospectwizard.com
get a free 30 day trial. Talk to my boy Dave Gallen. He will get
you all set up and let the leads flow based on the
Wizard. Go get him.
This is Pete Moore on Halo Talks nyc. I have the pleasure of
(01:07):
bringing to our podcast Emma and Ben
Starworthy from Melbourne, Australia. I know the full
waltzy Matilda from my Katiki Tour back in
1993. We are going to talk about pilates, we're going to talk
about Australia, we're going to talk about the Internet and we're going to talk about
running a family business. So welcome to the show.
(01:29):
Thanks, Pete. Great to be here. So shout out to
Brian for Brian Anderson for hooking us up. And
you know, it sounds like you guys have been, you know, serial
entrepreneurs, always have big business ideas since your
childhood. So you want to take us through, you know, that itch and now
what's being scratched? Yeah, the itch has definitely
(01:51):
been there. There's no doubt about it. I was fortunate at the age
of 22 to buy a rundown health club. So I got the
opportunity to purchase that club and yeah, it was extremely run down.
I was actually with Em at the time. So she's been on the journey right
from the start. And yeah, from that
rundown health club, we worked together, we built it to six
(02:12):
clubs through a lot of innovation and doing a lot of things ahead
of time and we exited
that health club. We're very fortunate. There's a lot of different stages
along the way of that journey. It's been a few itches
scratched along the way. I mean, there's definitely that entrepreneurial spirit
innately. We've had laser skirmish businesses and we had a
(02:34):
farmer's golf business and we had a lease that was gonna be a bar and
a restaurant. So we've had lots of things along the way
that we've learned to laser focus in on, I
guess, one core thing and do one core thing really well. So
Ben's learned to be restrained in that regard. But I think when we've launched
Euroformer, the sky's the limit. We can
(02:56):
dream big. It can be a global business. When we had our chain of
gyms, realistically, you're looking at a 5 to 10 kilometer radius in
terms of your catchment realistically around there. So that's
limited in terms of where what you can dream. So it's been
really exciting on this journey. I definitely wouldn't describe myself as an
entrepreneur. I thought I would be in the corporate world and climb the ladder
(03:20):
and that Ben talked me into joining the business and
I've learned to take risks and
enjoy the journey and haven't looked back since. That's great.
So, you know, by I was saying this earlier today, but,
you know, experience is what you get when you don't get what you want is
what one of my mentors said to me a very long time ago. So,
(03:43):
you know, when you jumped into this health club opportunity, did you have
a vision for, you know, what was going wrong or,
you know, were able to kind of identify quickly what the levers
were and maybe talk about how much confidence
you started to gain, you know, as a couple and as a team
going in and saying, look, I could diagnose what the problems are. I also know
(04:06):
how to execute, not on PowerPoint, but actually know how to make change
quickly. And that kind of gave you the confidence to start to jump into some
of these other opportunities. Because she understood that, like, okay,
this is kind of like a case study. And if I can nail the case
study, then, like, it gives me more confidence to do next ones.
Yeah, absolutely. I think the first thing, Pete, I mean, the club was losing
(04:27):
$10,000 per month. It was completely run down. So
even just doing things like a paint job and getting some things
improved in the facility, I only had three months of working capital, so I
didn't have a lot of time on my side. So I had to get things
moving quite quickly. Fortunately, there was a great team in place.
We had a team of about 15 team members at the time. And
(04:50):
for the 13 years we had the health clubs, we still had six of those
original founding team members. So for me, it was about
how do we upskill the team to get the most out of their day, where
do we need to focus our time and then ultimately listening to the
members. All of our inspirations really come from what our members need, what
they want. How do we keep reinventing the clubs? What one of the main things
(05:12):
we did was back in 2010 seems a long time ago now. We went 24
7. Our membership went from 900 members to 1500 members
within three months. So we really saw that demand
and where they could take the clubs and constantly. Yeah, yeah.
That gave us the confidence, I guess, to know that, you know, we were good
at execution. So it was just about making sure that you recognize
(05:33):
what the trends are. What are you seeing, what's going to work in your
space? What do you ultimately customer centric,
focused, you know, what solution are you solving for them? And that's been something
that we've continued along into this business as well. And then that
team piece that Ben mentioned, again, learning
and developing as leaders and as managers and then creating a
(05:56):
high performance team. So it's been exciting with your reforma to start
fresh and really bring together some amazing
people who have a shared vision
and objectives of the business and then, you know, to be able to achieve great
things together. So one question I have would be, are
you changing it to 24 7? Do you think those 600
(06:18):
incremental members that resonated with them and they actually used
it, or just the fact that that option value was there kind
of created a different view of the value,
you know, price to value. It's definitely a mixture of both. Without
doubt. The value proposition definitely changed. We took away the excuses and the
barriers at that point of making the decision.
(06:41):
And I think it was, you know, people want to be onto something that's
trending. Right. It's like, wow, you see that 247 gym that's open up.
So it definitely created a bigger radius for our
clubs than a traditional 5 kilometer radius. People will prepare to travel because
obviously we're open, we're available. Yeah. So I hope that
answers the question. And did, did you keep the. The. The same
(07:03):
name or did you change the name when you bought it?
We just added the 247 to it, so. Oh, sorry.
When we went 24 7. Yeah. So we'll Pinnacle Health Clubs. Yeah,
we kept the same name right. From the start and. And you sold it to
a company called Viva Leisure. Was that deliberate?
Did they come to you? How did that evolve?
(07:26):
Yeah, it wasn't deliberate. That wasn't actually,
you know, we're looking to continue to grow. We're up to six health clubs, all
successful. And we started going down a process
of what was next. Do we need a raise? How do we get to
10, 20 locations? So we bootstrapped the whole thing and
then going through that journey, come across Viva Leisure, and they were aggressively
(07:49):
growing and they were on a different journey of going, wow, we need to get
into Melbourne. We need to get into Victoria. There's a great chain there. We
started conversations with them when we were introduced to them through
someone that was supporting us. And that was prior to
Covid. Things started moving quite quickly. People were quite interested
in our group. And then Covid, of course, hit. So we had a false
(08:11):
start there. We reopened after six months. Conversation
started again. Melbourne locked down again in two weeks. And
we're like, okay, well, that's probably off the cards. So we just focused
on making sure our clubs were as strong as possible during that time. We
had a really, when I say a successful Covid period, it really
was successful. Australia was quite fortunate with some
(08:33):
of the initiatives from the government and we're really able to leverage that to keep
our team working and really contributing to supporting the business.
Post opening for the third time, Veeva did come back and
eventually we negotiated terms and things moved quite
quickly from there. They're a great company to deal with and they still are.
(08:56):
This is Pete Moore. I want to let you in on a little secret. There's
this company called Promotion Vault. And what they do is they give out rewards
from retailers that allow you to incentivize your
members without having to do zero down and one month
free or giving away shakes or giving away T shirts.
What you want to do is build a rewards program that lasts,
(09:18):
that people value, and that doesn't discount your own products and services.
So here's the deal. There's something called Rewards Vault. The Rewards
Vault is going to allow a member to set up their own profile.
They are going to answer questions, you are going to get those answers, you're going
to be able to target those members, and you're going to reward them inside your
club, inside your spa, and outside of the club and outside
(09:41):
of the spa to get them to become loyal, to get them to pay
their monthly dues and to be rewarded properly
for the actions. A lot of companies are cutting back on rewards. You shouldn't
be. Promotion Vault, your answer, trust me, this is real.
You know, one of the takeaways, and my day job, besides doing the
(10:04):
podcast here and, and some professional education, is
mergers and acquisitions. And, you know, when you have a company
like Viva that has a stated growth plan
that wants to be in your market and wants to buy you,
they have kind of like a Limited
timeline to say, okay, you know, we'll transact with you as
(10:26):
quote unquote, the platform in Melbourne. If they bought someone
else, you know, they might not come back to you at the same price. They
might not want to talk to you anymore because they feel like they've accomplished, you
know, their, their land grab if you will, and have some,
some, some assets in the ground. So can you talk about. And,
and what I usually say is when the big 800 pound gorilla comes around, you
(10:48):
know, wherever you are, you know, try and get a deal done because there's a
finite amount of capital and if they're a strategic partner,
strategic buyer, they might only be strategic one time
and that's when they want to buy and not when you want to sell. So
can you give a little bit of insight into that? Your gut said,
hey, I'm not going to let this fish off the line, if you will, as
(11:09):
an analogy. Yeah, I think, I mean to take a step
back, we did so much work on our model and what we wanted to be
as a company. So we positioned in, you know, we're a full
service club but we really chase yield in our clubs and they come
from our personal journey really like if we, if we take a step back.
How we found Reforma Pilates, first of all to modality was through our
(11:31):
fertility journey and that's when we first
found Reforma Pilates. Yeah, I mean there's the long list of benefits
to so many people, those consistent Pilates practice and I've got
my own personal story with that. But through
that awareness we wanted to kind of be able to bring that and we knew
our demographics, our customers, our members would
(11:55):
really receive that. Well in Australia, Reforma Pilates was starting to
really have a growth trajectory as well. And we knew people were having
pain to go to a studio down the road and paying for their
heat program as well. And we wanted to be able to bring it all on
one umbrella and not lose people, but then also be able to provide
an affordable membership. So we created, I guess boutique
(12:16):
brands because the boutique element of it was important to the experience.
So boutique brands under the overarching gym brand
and then offer a studio membership. So we had a unique model that we're seeing
so much more now in the fitness industry. But you know, this is going back
sort of seven, eight years now that we introduced it, maybe longer.
So we knew we had something that was a little bit different,
(12:39):
some learnings that Viva Leisure could look at from a
strategic sense as opposed to just ideal locations that was
Making profit that they could plug into their business. Was it
Pilates, a separate entrance or was under your,
your Pinnacle door? It was, it was, it was
within Pinnacle. That was made a separate boutique within
(13:01):
Pinnacle. So yeah, that did have a separate entrance within club. It had
a separate brand and feel and aesthetic. Like when you walked in, a different
smell even. We really wanted it to be a different vibe
from the overarching other spaces.
It had its own zone. Just to give you some numbers on that as well,
Pete, just for anyone listening, we originally had
(13:24):
launched a small group training program in all of our clubs. And we see that
a lot now in the industry, right. And everyone's chasing yield, how do we get
it? So we did a small group training program that we could integrate roughly about
six and a half percent of our membership base. So for a 2000 member
club, we had 130 members in there paying sort of 40, $50 per
week. You know, that was still really healthy for that program.
(13:46):
But when we incorporated wellness so that being with formal Pilates
and yoga, dedicated studios across three of our
clubs, but then reformer across all of the clubs, that integration went to
30% of all of our membership. So just having
that additional wellness element brought in a brand new member to the clubs
that we'd never seen, had been living in the area. And then some
(14:08):
of our payers that were some of our foundation members, they might have
been on, you know, some of the lowest rates were prepared to pay
40, $50 per week to now have access to what they saw as
their future training program. To go back to your question though,
about the acquisition and not wanting to lose it, it
might not be coming back around again. You're right to the point. So, you
(14:30):
know, we had this and we were confident in our negotiations with them
because we knew our model and the numbers and what was
showing up. So therefore we were also comfortable with
it, not with them walking away and
us continuing to grow in a space that we felt there was a lot of
opportunity in the fitness industry coming of COVID lockdowns here
(14:52):
in Melbourne in particular. But you've got to be able to put your personal
attachments. There's a lot of personal attachments to your business, to your
baby and look at it as a commercial. So what,
you know, make sure you're equipped with the right advisors around what is
a realistic valuation that
you can, you know, have some wiggle room in negotiation to
(15:14):
move with and then be able to know what's my bottom, what would I
walk away from, what am I comfortable with? So you can then go in there
and be comfortable with either decision and have no regrets. That's great.
Yeah. I always say you gotta negotiate from a position of
strength. You also gotta look at it unemotional. We've done
deals with owners that, you know, miss the first opportunity and
(15:37):
then, you know, things unravel sometimes
after that because you don't have as much confidence in your business. You think,
you know, get a little bit wary about whether the buyer is going
to try and tie you up and then, you know, undercut the deal.
So the first bite's usually the best. One
to stay present too. I think you start to picture what your life
(16:00):
could look like if you didn't have this business or if you had this
exit plan. It's very easy to do that. And so that I think
that's part of also, if it doesn't come through, really hard to
come back from. Yeah, yeah. So. So once that transaction happened,
you sold everything to them. Will you still retain some of the reformer
part of the business? Everything? Yeah. All
(16:24):
six health clubs got it. Yeah. 100 team members
handed over. Yeah, got it. And then from a
non compete standpoint, and I'm not sure how things work in Australia,
but what you do talk about what you're doing now and how that is
not tripped up by your, you know, the sale.
Yeah, so our non compete was more based around
(16:47):
opening up bricks and mortar facilities, you know, not competing, going open up
a health club or consulting to local competitors and things like that.
So yeah, really what we've gone and created, we're not
opening up bricks and mortar facilities. You know, we're a manufacturer
of a product, we have digital solutions and yeah, we more
obviously chat a bit more around that, but it didn't compete with Fever.
(17:10):
Now when you take a look at the Pilates and you know, class
pass came out and said that Pilates was a top 20, 24,
you know, workout. I don't think you get through a trade show without
four or five, you know, new Pilates machines and different,
you know, you know, digital subscriptions.
So what's a special sauce that you say, hey, look, our
(17:34):
machine is based on xyz, our content,
our commitment to the product, which I don't think some people
take into account, you know, that some early stage manufacturing
businesses of equipment like you also have
to bet on the fact that they're going to be there for maintenance, for content
(17:54):
creation, you know, for ongoing support for a community
instructor. So how have you kind of position that and how
is, how did you kind of Rewire your brain, if you will,
to say, hey, all that human interaction that I had at
Pinnacle and Pinnacle 247 with the people
that worked for you as well as the members, you know, you. That was
(18:17):
basically, you kind of wore that brand as like on
your sleeve and they had confidence in you. And now you're kind of saying, well,
you know, now I'm selling you a device. So talk about, like, how you've been
able to kind of manage through
digital is not necessarily human, but
I can push that through content or I could kind of create a
(18:39):
community, even though I'm not
beating heart in front of you. Do you want to start off?
Yeah. I mean, I still think it is from our beating heart. I
mean, a big part of why we're successful is
the way we communicate, the way we engage
a community. So, yes, we sell hardware, we sell
(19:01):
products, and we sell digital software as
well, but we, we sell solutions. So
from a D2C perspective, we bring the studio
offering to your home. From a commercial perspective, we provide
a range of different solutions depending on the business model. And
it all comes from what,
(19:24):
I guess, needs the customer has and what, what problems
it's presenting for them that we are solving, you know, and I think
because we are so innately
attracted to, or I guess passionate about
Pilates and the benefits that that can provide
(19:44):
as that combines so beautifully with the business
acumen that we have and the model, the robust model that we've built
to continue to talk
to our core customers in a way that some
others are not. And are you provide. Are you
selling into clubs as well as selling into the home?
(20:07):
And do you feel like you're like maybe the wholesale channel, if
you will, is more of an extension of who you are. And
knowing that this, what you've, what you've, the success you've
had by putting a group exercise boutique inside of a
club, that you're basically replicating that and scaling it
from what you learned and what you built before. How's that for
(20:30):
a long winded question? Okay.
We'Ve got it. There's different models that we see. I mean, we're
supplying to eight of the ten major gym chains here in Australia now. And
each of those gym chains will have a slightly different variation on
what reform Pilates is for their community. So some will
(20:50):
be full on demand, where we'll have our reformers and what we call our
kiosk, and they'll come in. Some of our facilities will
have 20, 24 units in a separate part of the gym. People
will pay an additional five to ten dollars per week to access that space
and those members unlock access to unlimited Reformer Pilates. So
then we've got smaller like you think of a Snap Fitness even during like
(21:13):
we supply to Snap Fitness here in Australia and it's been really successful
for their network. Some snaps are bigger, some are smaller. The smaller ones
finally have two to four machines with the kiosk. Then some of the
biggest snaps will have a full studio offering but then run it as a hybrid
and run the digital outside of the classes. So yeah, really
it's depending on the space they've got available. What
(21:36):
we've been able to create is we've been able to make reform plays accessible for
any facility. Whether that's two machines, one machine
or 24 machines. That's now an option.
Yeah, and a follow on question that I've been preaching for like 10
years that a health club is effectively an equipment
church showroom and that at some point there should be a QR
(21:58):
code that says you want to buy this piece of equipment for your home, you
know, click here on this QR code or scan this and
you know, they basically become your distributor. Have you seen
any of that as a potential even like cutting the
club in on some kind of sale price or like
leveraging that relationship or. Is that great idea Pete? But
(22:20):
that just. It's not how it happens. I mean it's a great idea Pete,
but yeah, at this stage it's not something that you know, we're focused on.
But there's definitely, don't get me wrong, exposure definitely
supports brand awareness for sure. But
what we're finding, I mean it does depend on the region. So you know, there's
from a home market perspective there's lack of accessibility
(22:43):
to start particularly in Australia. It's a large country but you've
got very dense pockets in metro. But then we have a lot of people who
live regionally who can't get to a studio or can't get to a gym nearby.
So that can be of having something that can be in their home that they
can do is, you know, has been life
changing for them. But in the metro cities
(23:04):
where you've got plenty of options, the feedback we get from our customers
there is that they actually like having the convenience of it at home,
but they still want that in studio. They'll still go to
their gym or their studio once. Like to call it a die hard. If I
think about someone like me who has two little children at home,
busy working as well, juggling career, juggling family Everything. It
(23:27):
can be very difficult to get to as many classes as I would love to
get to or that I used to get to before I was a mum. So
I can get to my one that it's my ride or die. That's the time
I get to and then I can supplement it and stay consistent and still get
some amazing results and benefits from it with having it at home.
This is Pete Moore. Here's the last tip for you of the podcast.
(23:51):
We are partnered up with a company called higher dose
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(24:12):
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Having your members walk out of the club and going into one of their locations
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(24:34):
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just as good as the workout.
(24:58):
You know, during COVID I spent a lot of time on my, my soul
cycle bike Pilates. You know, equipment during COVID
was not really as, as prevalent as it is now, obviously.
How do you feel about, from, from a,
from equipment that's at the home to results and
motivation that can be done by yourself. Where does the
(25:21):
Pilates machine kind of rank if you want to like force rank
in that? I have no idea what the answer could be to this, but I'm.
That's why I'm asking the question. And we'll have our instructor.
I mean, for me, where it ranks is it depends on where that person is
in life, right? Because there's a certain person that
(25:41):
really, really could benefit more from reform of Pilates. And I saw that
through our journey to fertility as an example.
So, yeah, I think it depends. I think the people that we see the
most in our community, they really need Reforma Pilates. It's a
massive part of them. But in terms of using it, I think part of what
you're asking is will they use it at home, how do they stay motivated and
(26:02):
that sort of thing? I think, you know that that is not any
dissimilar to any other piece of equipment in terms of engagement with challenges and
giving them, you know, taking the thought out of what should I be doing today?
We have a range of lengths of classes in terms of time,
range of options. We've got physio, physiotherapist
led classes that can cater for different injuries or different stages of life, et
(26:24):
cetera as well. So sort of we try to have enough for everyone. But then
I think the unique thing about Reformer Pilates specifically
is that people find that it's so varied
in what you can do. There's so much variety in every
single workout when you turn up and the feeling
of empowerment and that kind of mindfulness improvement that you
(26:47):
can get from the movement as well. Kind of all couples to kind of really
drawing you back each time. And also we're
design led with our equipment. We want it to be a pride
of home equipment that you have there. So people are really proud of
this piece and they think about this space and create more of a haven.
So again, drawn to having that me time to allocate it to them
(27:09):
in their home to keep going back to. We haven't had that kind of story
where you used to hear that treadmills become your clothesline.
That's not what we're hearing with the Reformer. Yeah, gotcha,
gotcha. Well, we can talk for a long time, I'm sure. But
in closing here, any quotes or
entrepreneurial takeaways that you can
(27:30):
expose to us or, you know, how you've gone and become
successful serial entrepreneurs and you know, stay married and
have kids and you know, parameters maybe,
or no parameters would be like, look, we're on life and we're on business like
24 7. Like free, you know, free, free will, whatever. We want to
talk about it. Okay. I mean,
(27:53):
one thing that I've always been big on is it's not what happens to you
in life, it's what you do about it, how you come back from that
situation. So I think Covid represented that best for everyone.
And yeah, I think we have challenges on a daily basis as
entrepreneurs, business owners, mums, dads,
husband and wife. So it's all about, yeah, what
(28:14):
you learn from that and how you come back from it. And I think for
me it's really about what I've learned from this business in particular
is it's cliche, but it's true.
Finding what you're passionate about and if you can then
build a business or a career out of what you're passionate about,
that I have found has been the secret sauce in terms
(28:37):
of motivation and pushing through. Awesome.
All right. Pilates everywhere, anytime. The
stalwarty family. Congrats on what you built, man. Look forward to
seeing a Pilates machine here in New York City that I can
jump on. And great, great work of the passion. Thank.
(29:14):
You, Sa.
I am super excited to announce that we now have a formal
partnership with the Prospect Wizard. And when I say
wizard, I mean wizard. Obviously you have a website.
This allows you to convert your website traffic visitors
directly into leads. It's not just another chatbot and
it's not AI but it allows a visitor to call, text or leave a
(00:22):
voicemail immediately. Goes to you, your sales team or anyone else in the
club instantly. MIT shows a study that if you contact
the lead within 10 minutes, chance of them converting goes up nine
times that of the average. We got the Atlanta clubs on
it. Vita Fitness, Gold's Gym, Mountainside
City Fitness, Philly, College Park. Become one
(00:44):
of the next Halo companies to deploy the Wizard.
It's easy to use. Go to the prospectwizard.com
get a free 30 day trial. Talk to my boy Dave Gallen. He will get
you all set up and let the leads flow based on the
Wizard. Go get him.
This is Pete Moore on Halo Talks nyc. I have the pleasure of
(01:07):
bringing to our podcast Emma and Ben
Starworthy from Melbourne, Australia. I know the full
waltzy Matilda from my Katiki Tour back in
1993. We are going to talk about pilates, we're going to talk
about Australia, we're going to talk about the Internet and we're going to talk about
running a family business. So welcome to the show.
(01:29):
Thanks, Pete. Great to be here. So shout out to
Brian for Brian Anderson for hooking us up. And
you know, it sounds like you guys have been, you know, serial
entrepreneurs, always have big business ideas since your
childhood. So you want to take us through, you know, that itch and now
what's being scratched? Yeah, the itch has definitely
(01:51):
been there. There's no doubt about it. I was fortunate at the age
of 22 to buy a rundown health club. So I got the
opportunity to purchase that club and yeah, it was extremely run down.
I was actually with Em at the time. So she's been on the journey right
from the start. And yeah, from that
rundown health club, we worked together, we built it to six
(02:12):
clubs through a lot of innovation and doing a lot of things ahead
of time and we exited
that health club. We're very fortunate. There's a lot of different stages
along the way of that journey. It's been a few itches
scratched along the way. I mean, there's definitely that entrepreneurial spirit
innately. We've had laser skirmish businesses and we had a
(02:34):
farmer's golf business and we had a lease that was gonna be a bar and
a restaurant. So we've had lots of things along the way
that we've learned to laser focus in on, I
guess, one core thing and do one core thing really well. So
Ben's learned to be restrained in that regard. But I think when we've launched
Euroformer, the sky's the limit. We can
(02:56):
dream big. It can be a global business. When we had our chain of
gyms, realistically, you're looking at a 5 to 10 kilometer radius in
terms of your catchment realistically around there. So that's
limited in terms of where what you can dream. So it's been
really exciting on this journey. I definitely wouldn't describe myself as an
entrepreneur. I thought I would be in the corporate world and climb the ladder
(03:20):
and that Ben talked me into joining the business and
I've learned to take risks and
enjoy the journey and haven't looked back since. That's great.
So, you know, by I was saying this earlier today, but,
you know, experience is what you get when you don't get what you want is
what one of my mentors said to me a very long time ago. So,
(03:43):
you know, when you jumped into this health club opportunity, did you have
a vision for, you know, what was going wrong or,
you know, were able to kind of identify quickly what the levers
were and maybe talk about how much confidence
you started to gain, you know, as a couple and as a team
going in and saying, look, I could diagnose what the problems are. I also know
(04:06):
how to execute, not on PowerPoint, but actually know how to make change
quickly. And that kind of gave you the confidence to start to jump into some
of these other opportunities. Because she understood that, like, okay,
this is kind of like a case study. And if I can nail the case
study, then, like, it gives me more confidence to do next ones.
Yeah, absolutely. I think the first thing, Pete, I mean, the club was losing
(04:27):
$10,000 per month. It was completely run down. So
even just doing things like a paint job and getting some things
improved in the facility, I only had three months of working capital, so I
didn't have a lot of time on my side. So I had to get things
moving quite quickly. Fortunately, there was a great team in place.
We had a team of about 15 team members at the time. And
(04:50):
for the 13 years we had the health clubs, we still had six of those
original founding team members. So for me, it was about
how do we upskill the team to get the most out of their day, where
do we need to focus our time and then ultimately listening to the
members. All of our inspirations really come from what our members need, what
they want. How do we keep reinventing the clubs? What one of the main things
(05:12):
we did was back in 2010 seems a long time ago now. We went 24
7. Our membership went from 900 members to 1500 members
within three months. So we really saw that demand
and where they could take the clubs and constantly. Yeah, yeah.
That gave us the confidence, I guess, to know that, you know, we were good
at execution. So it was just about making sure that you recognize
(05:33):
what the trends are. What are you seeing, what's going to work in your
space? What do you ultimately customer centric,
focused, you know, what solution are you solving for them? And that's been something
that we've continued along into this business as well. And then that
team piece that Ben mentioned, again, learning
and developing as leaders and as managers and then creating a
(05:56):
high performance team. So it's been exciting with your reforma to start
fresh and really bring together some amazing
people who have a shared vision
and objectives of the business and then, you know, to be able to achieve great
things together. So one question I have would be, are
you changing it to 24 7? Do you think those 600
(06:18):
incremental members that resonated with them and they actually used
it, or just the fact that that option value was there kind
of created a different view of the value,
you know, price to value. It's definitely a mixture of both. Without
doubt. The value proposition definitely changed. We took away the excuses and the
barriers at that point of making the decision.
(06:41):
And I think it was, you know, people want to be onto something that's
trending. Right. It's like, wow, you see that 247 gym that's open up.
So it definitely created a bigger radius for our
clubs than a traditional 5 kilometer radius. People will prepare to travel because
obviously we're open, we're available. Yeah. So I hope that
answers the question. And did, did you keep the. The. The same
(07:03):
name or did you change the name when you bought it?
We just added the 247 to it, so. Oh, sorry.
When we went 24 7. Yeah. So we'll Pinnacle Health Clubs. Yeah,
we kept the same name right. From the start and. And you sold it to
a company called Viva Leisure. Was that deliberate?
Did they come to you? How did that evolve?
(07:26):
Yeah, it wasn't deliberate. That wasn't actually,
you know, we're looking to continue to grow. We're up to six health clubs, all
successful. And we started going down a process
of what was next. Do we need a raise? How do we get to
10, 20 locations? So we bootstrapped the whole thing and
then going through that journey, come across Viva Leisure, and they were aggressively
(07:49):
growing and they were on a different journey of going, wow, we need to get
into Melbourne. We need to get into Victoria. There's a great chain there. We
started conversations with them when we were introduced to them through
someone that was supporting us. And that was prior to
Covid. Things started moving quite quickly. People were quite interested
in our group. And then Covid, of course, hit. So we had a false
(08:11):
start there. We reopened after six months. Conversation
started again. Melbourne locked down again in two weeks. And
we're like, okay, well, that's probably off the cards. So we just focused
on making sure our clubs were as strong as possible during that time. We
had a really, when I say a successful Covid period, it really
was successful. Australia was quite fortunate with some
(08:33):
of the initiatives from the government and we're really able to leverage that to keep
our team working and really contributing to supporting the business.
Post opening for the third time, Veeva did come back and
eventually we negotiated terms and things moved quite
quickly from there. They're a great company to deal with and they still are.
(08:56):
This is Pete Moore. I want to let you in on a little secret. There's
this company called Promotion Vault. And what they do is they give out rewards
from retailers that allow you to incentivize your
members without having to do zero down and one month
free or giving away shakes or giving away T shirts.
What you want to do is build a rewards program that lasts,
(09:18):
that people value, and that doesn't discount your own products and services.
So here's the deal. There's something called Rewards Vault. The Rewards
Vault is going to allow a member to set up their own profile.
They are going to answer questions, you are going to get those answers, you're going
to be able to target those members, and you're going to reward them inside your
club, inside your spa, and outside of the club and outside
(09:41):
of the spa to get them to become loyal, to get them to pay
their monthly dues and to be rewarded properly
for the actions. A lot of companies are cutting back on rewards. You shouldn't
be. Promotion Vault, your answer, trust me, this is real.
You know, one of the takeaways, and my day job, besides doing the
(10:04):
podcast here and, and some professional education, is
mergers and acquisitions. And, you know, when you have a company
like Viva that has a stated growth plan
that wants to be in your market and wants to buy you,
they have kind of like a Limited
timeline to say, okay, you know, we'll transact with you as
(10:26):
quote unquote, the platform in Melbourne. If they bought someone
else, you know, they might not come back to you at the same price. They
might not want to talk to you anymore because they feel like they've accomplished, you
know, their, their land grab if you will, and have some,
some, some assets in the ground. So can you talk about. And,
and what I usually say is when the big 800 pound gorilla comes around, you
(10:48):
know, wherever you are, you know, try and get a deal done because there's a
finite amount of capital and if they're a strategic partner,
strategic buyer, they might only be strategic one time
and that's when they want to buy and not when you want to sell. So
can you give a little bit of insight into that? Your gut said,
hey, I'm not going to let this fish off the line, if you will, as
(11:09):
an analogy. Yeah, I think, I mean to take a step
back, we did so much work on our model and what we wanted to be
as a company. So we positioned in, you know, we're a full
service club but we really chase yield in our clubs and they come
from our personal journey really like if we, if we take a step back.
How we found Reforma Pilates, first of all to modality was through our
(11:31):
fertility journey and that's when we first
found Reforma Pilates. Yeah, I mean there's the long list of benefits
to so many people, those consistent Pilates practice and I've got
my own personal story with that. But through
that awareness we wanted to kind of be able to bring that and we knew
our demographics, our customers, our members would
(11:55):
really receive that. Well in Australia, Reforma Pilates was starting to
really have a growth trajectory as well. And we knew people were having
pain to go to a studio down the road and paying for their
heat program as well. And we wanted to be able to bring it all on
one umbrella and not lose people, but then also be able to provide
an affordable membership. So we created, I guess boutique
(12:16):
brands because the boutique element of it was important to the experience.
So boutique brands under the overarching gym brand
and then offer a studio membership. So we had a unique model that we're seeing
so much more now in the fitness industry. But you know, this is going back
sort of seven, eight years now that we introduced it, maybe longer.
So we knew we had something that was a little bit different,
(12:39):
some learnings that Viva Leisure could look at from a
strategic sense as opposed to just ideal locations that was
Making profit that they could plug into their business. Was it
Pilates, a separate entrance or was under your,
your Pinnacle door? It was, it was, it was
within Pinnacle. That was made a separate boutique within
(13:01):
Pinnacle. So yeah, that did have a separate entrance within club. It had
a separate brand and feel and aesthetic. Like when you walked in, a different
smell even. We really wanted it to be a different vibe
from the overarching other spaces.
It had its own zone. Just to give you some numbers on that as well,
Pete, just for anyone listening, we originally had
(13:24):
launched a small group training program in all of our clubs. And we see that
a lot now in the industry, right. And everyone's chasing yield, how do we get
it? So we did a small group training program that we could integrate roughly about
six and a half percent of our membership base. So for a 2000 member
club, we had 130 members in there paying sort of 40, $50 per
week. You know, that was still really healthy for that program.
(13:46):
But when we incorporated wellness so that being with formal Pilates
and yoga, dedicated studios across three of our
clubs, but then reformer across all of the clubs, that integration went to
30% of all of our membership. So just having
that additional wellness element brought in a brand new member to the clubs
that we'd never seen, had been living in the area. And then some
(14:08):
of our payers that were some of our foundation members, they might have
been on, you know, some of the lowest rates were prepared to pay
40, $50 per week to now have access to what they saw as
their future training program. To go back to your question though,
about the acquisition and not wanting to lose it, it
might not be coming back around again. You're right to the point. So, you
(14:30):
know, we had this and we were confident in our negotiations with them
because we knew our model and the numbers and what was
showing up. So therefore we were also comfortable with
it, not with them walking away and
us continuing to grow in a space that we felt there was a lot of
opportunity in the fitness industry coming of COVID lockdowns here
(14:52):
in Melbourne in particular. But you've got to be able to put your personal
attachments. There's a lot of personal attachments to your business, to your
baby and look at it as a commercial. So what,
you know, make sure you're equipped with the right advisors around what is
a realistic valuation that
you can, you know, have some wiggle room in negotiation to
(15:14):
move with and then be able to know what's my bottom, what would I
walk away from, what am I comfortable with? So you can then go in there
and be comfortable with either decision and have no regrets. That's great.
Yeah. I always say you gotta negotiate from a position of
strength. You also gotta look at it unemotional. We've done
deals with owners that, you know, miss the first opportunity and
(15:37):
then, you know, things unravel sometimes
after that because you don't have as much confidence in your business. You think,
you know, get a little bit wary about whether the buyer is going
to try and tie you up and then, you know, undercut the deal.
So the first bite's usually the best. One
to stay present too. I think you start to picture what your life
(16:00):
could look like if you didn't have this business or if you had this
exit plan. It's very easy to do that. And so that I think
that's part of also, if it doesn't come through, really hard to
come back from. Yeah, yeah. So. So once that transaction happened,
you sold everything to them. Will you still retain some of the reformer
part of the business? Everything? Yeah. All
(16:24):
six health clubs got it. Yeah. 100 team members
handed over. Yeah, got it. And then from a
non compete standpoint, and I'm not sure how things work in Australia,
but what you do talk about what you're doing now and how that is
not tripped up by your, you know, the sale.
Yeah, so our non compete was more based around
(16:47):
opening up bricks and mortar facilities, you know, not competing, going open up
a health club or consulting to local competitors and things like that.
So yeah, really what we've gone and created, we're not
opening up bricks and mortar facilities. You know, we're a manufacturer
of a product, we have digital solutions and yeah, we more
obviously chat a bit more around that, but it didn't compete with Fever.
(17:10):
Now when you take a look at the Pilates and you know, class
pass came out and said that Pilates was a top 20, 24,
you know, workout. I don't think you get through a trade show without
four or five, you know, new Pilates machines and different,
you know, you know, digital subscriptions.
So what's a special sauce that you say, hey, look, our
(17:34):
machine is based on xyz, our content,
our commitment to the product, which I don't think some people
take into account, you know, that some early stage manufacturing
businesses of equipment like you also have
to bet on the fact that they're going to be there for maintenance, for content
(17:54):
creation, you know, for ongoing support for a community
instructor. So how have you kind of position that and how
is, how did you kind of Rewire your brain, if you will,
to say, hey, all that human interaction that I had at
Pinnacle and Pinnacle 247 with the people
that worked for you as well as the members, you know, you. That was
(18:17):
basically, you kind of wore that brand as like on
your sleeve and they had confidence in you. And now you're kind of saying, well,
you know, now I'm selling you a device. So talk about, like, how you've been
able to kind of manage through
digital is not necessarily human, but
I can push that through content or I could kind of create a
(18:39):
community, even though I'm not
beating heart in front of you. Do you want to start off?
Yeah. I mean, I still think it is from our beating heart. I
mean, a big part of why we're successful is
the way we communicate, the way we engage
a community. So, yes, we sell hardware, we sell
(19:01):
products, and we sell digital software as
well, but we, we sell solutions. So
from a D2C perspective, we bring the studio
offering to your home. From a commercial perspective, we provide
a range of different solutions depending on the business model. And
it all comes from what,
(19:24):
I guess, needs the customer has and what, what problems
it's presenting for them that we are solving, you know, and I think
because we are so innately
attracted to, or I guess passionate about
Pilates and the benefits that that can provide
(19:44):
as that combines so beautifully with the business
acumen that we have and the model, the robust model that we've built
to continue to talk
to our core customers in a way that some
others are not. And are you provide. Are you
selling into clubs as well as selling into the home?
(20:07):
And do you feel like you're like maybe the wholesale channel, if
you will, is more of an extension of who you are. And
knowing that this, what you've, what you've, the success you've
had by putting a group exercise boutique inside of a
club, that you're basically replicating that and scaling it
from what you learned and what you built before. How's that for
(20:30):
a long winded question? Okay.
We'Ve got it. There's different models that we see. I mean, we're
supplying to eight of the ten major gym chains here in Australia now. And
each of those gym chains will have a slightly different variation on
what reform Pilates is for their community. So some will
(20:50):
be full on demand, where we'll have our reformers and what we call our
kiosk, and they'll come in. Some of our facilities will
have 20, 24 units in a separate part of the gym. People
will pay an additional five to ten dollars per week to access that space
and those members unlock access to unlimited Reformer Pilates. So
then we've got smaller like you think of a Snap Fitness even during like
(21:13):
we supply to Snap Fitness here in Australia and it's been really successful
for their network. Some snaps are bigger, some are smaller. The smaller ones
finally have two to four machines with the kiosk. Then some of the
biggest snaps will have a full studio offering but then run it as a hybrid
and run the digital outside of the classes. So yeah, really
it's depending on the space they've got available. What
(21:36):
we've been able to create is we've been able to make reform plays accessible for
any facility. Whether that's two machines, one machine
or 24 machines. That's now an option.
Yeah, and a follow on question that I've been preaching for like 10
years that a health club is effectively an equipment
church showroom and that at some point there should be a QR
(21:58):
code that says you want to buy this piece of equipment for your home, you
know, click here on this QR code or scan this and
you know, they basically become your distributor. Have you seen
any of that as a potential even like cutting the
club in on some kind of sale price or like
leveraging that relationship or. Is that great idea Pete? But
(22:20):
that just. It's not how it happens. I mean it's a great idea Pete,
but yeah, at this stage it's not something that you know, we're focused on.
But there's definitely, don't get me wrong, exposure definitely
supports brand awareness for sure. But
what we're finding, I mean it does depend on the region. So you know, there's
from a home market perspective there's lack of accessibility
(22:43):
to start particularly in Australia. It's a large country but you've
got very dense pockets in metro. But then we have a lot of people who
live regionally who can't get to a studio or can't get to a gym nearby.
So that can be of having something that can be in their home that they
can do is, you know, has been life
changing for them. But in the metro cities
(23:04):
where you've got plenty of options, the feedback we get from our customers
there is that they actually like having the convenience of it at home,
but they still want that in studio. They'll still go to
their gym or their studio once. Like to call it a die hard. If I
think about someone like me who has two little children at home,
busy working as well, juggling career, juggling family Everything. It
(23:27):
can be very difficult to get to as many classes as I would love to
get to or that I used to get to before I was a mum. So
I can get to my one that it's my ride or die. That's the time
I get to and then I can supplement it and stay consistent and still get
some amazing results and benefits from it with having it at home.
This is Pete Moore. Here's the last tip for you of the podcast.
(23:51):
We are partnered up with a company called higher dose
higherdose.com they are the leader in
workout recovery products. Infrared technology,
LED light masks, neck enhancers and
other products such as PEMF mats and sauna
blankets. If you have not gotten on the workout
(24:12):
recovery train yet, your time and your stop
is now. You got to get these products in there before these workout
recovery and spas end up saturating your market.
Having your members walk out of the club and going into one of their locations
for 200 bucks per month where they're paying 39 to
you. Let's become an expert in workout recovery. If we
(24:34):
are already an authority in workouts, Higher dose,
check it out. There's a wholesale code and we look
forward to helping you augment your products and services
to meet the demands of your members. And hey, let's get people
happy, healthy and sweating. And the recovery should be
just as good as the workout.
(24:58):
You know, during COVID I spent a lot of time on my, my soul
cycle bike Pilates. You know, equipment during COVID
was not really as, as prevalent as it is now, obviously.
How do you feel about, from, from a,
from equipment that's at the home to results and
motivation that can be done by yourself. Where does the
(25:21):
Pilates machine kind of rank if you want to like force rank
in that? I have no idea what the answer could be to this, but I'm.
That's why I'm asking the question. And we'll have our instructor.
I mean, for me, where it ranks is it depends on where that person is
in life, right? Because there's a certain person that
(25:41):
really, really could benefit more from reform of Pilates. And I saw that
through our journey to fertility as an example.
So, yeah, I think it depends. I think the people that we see the
most in our community, they really need Reforma Pilates. It's a
massive part of them. But in terms of using it, I think part of what
you're asking is will they use it at home, how do they stay motivated and
(26:02):
that sort of thing? I think, you know that that is not any
dissimilar to any other piece of equipment in terms of engagement with challenges and
giving them, you know, taking the thought out of what should I be doing today?
We have a range of lengths of classes in terms of time,
range of options. We've got physio, physiotherapist
led classes that can cater for different injuries or different stages of life, et
(26:24):
cetera as well. So sort of we try to have enough for everyone. But then
I think the unique thing about Reformer Pilates specifically
is that people find that it's so varied
in what you can do. There's so much variety in every
single workout when you turn up and the feeling
of empowerment and that kind of mindfulness improvement that you
(26:47):
can get from the movement as well. Kind of all couples to kind of really
drawing you back each time. And also we're
design led with our equipment. We want it to be a pride
of home equipment that you have there. So people are really proud of
this piece and they think about this space and create more of a haven.
So again, drawn to having that me time to allocate it to them
(27:09):
in their home to keep going back to. We haven't had that kind of story
where you used to hear that treadmills become your clothesline.
That's not what we're hearing with the Reformer. Yeah, gotcha,
gotcha. Well, we can talk for a long time, I'm sure. But
in closing here, any quotes or
entrepreneurial takeaways that you can
(27:30):
expose to us or, you know, how you've gone and become
successful serial entrepreneurs and you know, stay married and
have kids and you know, parameters maybe,
or no parameters would be like, look, we're on life and we're on business like
24 7. Like free, you know, free, free will, whatever. We want to
talk about it. Okay. I mean,
(27:53):
one thing that I've always been big on is it's not what happens to you
in life, it's what you do about it, how you come back from that
situation. So I think Covid represented that best for everyone.
And yeah, I think we have challenges on a daily basis as
entrepreneurs, business owners, mums, dads,
husband and wife. So it's all about, yeah, what
(28:14):
you learn from that and how you come back from it. And I think for
me it's really about what I've learned from this business in particular
is it's cliche, but it's true.
Finding what you're passionate about and if you can then
build a business or a career out of what you're passionate about,
that I have found has been the secret sauce in terms
(28:37):
of motivation and pushing through. Awesome.
All right. Pilates everywhere, anytime. The
stalwarty family. Congrats on what you built, man. Look forward to
seeing a Pilates machine here in New York City that I can
jump on. And great, great work of the passion. Thank.
(29:14):
You, Sa.
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