As JD Sports Fashion unveils its plan to launch a nationwide chain of gyms, Retail Week looks at the market.

Why are we talking about it now?

JD Sports Fashion is plotting a nationwide chain of gyms. The sportswear retailer says it is “about to become the UK’s premium, low cost gym brand” and has acquired its first site – a former Fitness First gym in Hull – for JD Gyms.

Is it the first retailer to branch into gyms?

No. JJB Sports had a 50-strong chain of gyms which it sold to founder Dave Whelan, which he rebranded as DW Sports Fitness. Tesco has also brought gyms into its stores as part of its plan to downsize its larger stores. It has partnered with gym operator Xercise4Less which has subletted space in its Stockton-on-Tees store.

Why has JD decided to move into gyms?

The Olympic effect has continued to buoy the UK appetite for sport and sports culture. Conlumino research shows that consumer spending on footwear at sportswear specialists alone was £1.05bn by the end of 2012 and spend is predicted to grow by 16.7% over the next five years.

JD is already one of the UK’s leading sportswear retailers and has strong brand recognition in that market. Although it focuses on the fashion-side of sportswear, it has made a push further into performance sportswear since JJB Sports’ demise in 2012 with the launch of its JD Pro fascia that targets sports enthusiasts.

Gyms are a lucrative business - JJB Fitness Clubs were the most profitable part of the retailer’s business, which is why Whelan snapped up the stores with gyms attached for his new venture. Gyms provide constant footfall of sports enthusiast and could offer JD a prime opportunity to cross-sell its products.

Is it risky?

The gym industry is not without hazard, according to Conlumino consultant Anusha Couttigane. Monthly memberships have been the key to building a sustainable business however several well known chains have come under fire from the OFT for unfair contract clauses and punitive cancellation fees.

Couttigane also points out that the fervour for sports is not limitless and the uplift from the London 2012 Olympics is already starting to “thin out”.

“It is strategic for JD Sports and, indeed, any sports-related business to capitalise on it now. JD is still seeking sites and it will be a while before the fitness club chain is fully operable, but it can’t afford to drag its feet. There is potential in the market, but it must be acted upon fast,” she says.