F45 was once the world’s fastest-growing fitness empire, but the struggling Australian-born gym chain now says it has a new winning strategy: shrinkage.
The new global boss of the cult gym says the chain’s wave of gym closures and recent catastrophic share price bloodbath are a good thing and “strengthen 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 prepared 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, was closing gyms in Sydney.
F45’s new global CEO Tom ‘Big Deal’ Dowd – a long-time 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 accident that led to Gilchrist leaving the company and his eventual replacement in March of this year.
“Closing unproductive sites to add value to existing studios strengthens our system,” he said in a statement.
“An important aspect of our real estate strategy is to avoid oversaturation.
“We are focused and committed to supporting our franchise network – their operational success helps ensure the entire system is strengthened.”
F45, which started in 2012 with a gym in Sydney, has grown to 1,555 studios and 2,801 franchises in 63 countries by mid-2021. It ultimately aimed to have 23,000 studios worldwide.
Mark Wahlberg invested $450 million in the company and celebrated its listing on the New York Stock Exchange (NYSE) with Australian co-founder Adam Gilchrist in mid-2021.
This financial support put Mr Gilchrist – who is not the famous cricketer of the same name – on the Australian Financial Review’s rich list.
A year later, “the world’s fastest-growing fitness company,” worth more than $2 billion, collapsed.
In August 2022, the gym’s stock price collapsed from $17.28 to just $3. It has continued to fall, with shares trading below $1 since April.
Mr Gilchrist resigned as chief executive last year amid an 82 per cent drop in F45’s share price, which halved revenue forecasts for the full year.
Mark Wahlberg and Tom Dowd, who go by “Big Deal Dowd” on Instagram, are longtime business partners.
Among F45’s newest strategies are “Mark Wahlberg Weeks” of special training sessions, free to non-F45 members.
Who is the new boss of the F45, Tom Dowd?
Tom Dowd is a Pittsburgh-born entrepreneur who was Wahlberg’s partner in the MW/TD Inspired investment group, Performance Inspired Nutrition and the Wahlburgers restaurant group.
Dowd was appointed after a $134 million credit facility was secured for F45 “to help the company reorganize its finances and stem the widespread closure of struggling gyms.”
Announcing the decision at the time, F45 Chairman of the Board Gene Davis said: “We are delighted to welcome Tom to help us further refine F45’s future business strategy to drive sustainable growth. , to improve opportunities for our franchisees and our team and to drive for the long term. value for shareholders.
Under Wahlberg’s tenure as brand manager, the company introduced “Wahlberg Week” featuring seven days of free training for non-F45 members.
But last month the company announced plans to delist from the New York Stock Exchange.
The delisting of the struggling fitness chain came after its stock price stayed below $1 for too long and the company failed to file its financial reports on time.
The Opulent group goes bankrupt
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 The website is filled with inspirational statements about success, with just one reading: ‘Since when does greatness have a limit? Dream big. The greatness is infinite. Without Borders. Unending.’
It claims to “offer world-class workouts.” That works.
The carnage at cult celebrity gym F45 continues with the closure of five gyms at its largest global franchise, the Opulent Group, founded by (left to right) Daniel Capilli, Jordan McCreary and Joel Egan.
However, the former owners of the OG F45 gyms are owed money and employees have claimed they had not received their superannuation for 12 months until they complained.
In some studios, businesses stopped paying rent and moved equipment out before being locked out, then sold it on Facebook Marketplace.
“The studios are closing and the numbers are going down pretty quickly at the moment,” said one former staffer.
The Opulent Group was founded by Tasmanian schoolboy and private physiotherapist Jordan McCreary, his friend Joel Egan and former Royal Australian Navy electronics technician Daniel Capilli.
The founders of the F45 Opulent Group party with gym members aboard a boat in Sydney Harbor in 2019, when the franchise was in great shape before its stock market bloodbath.
F45 gyms are closing, forcing franchisees to sell equipment on Facebook Marketplace and other online sites to recoup their investments
The success of the Opulent Group founders reflects the trajectory 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 funds at the time, has since disappeared, although he was pictured returning to Australia in July.
At least eight class action lawsuits have been launched in the United States against F45 related to NYSE floating, alleging “possible violations of securities laws and/or breaches of fiduciary duties.”