Dusseldorf Entrepreneur Rainer Schaller has made McFit the largest fitness chain in Germany. He died in a private plane crash last October.
Jobst Müller-Trimbusch and Hagen Wingertszahn now manage the company with the name RSG-Group, which stands for Rainer Schaller Global. Around the world, 6.4 million people train in the group’s 1,000 studios.
For the first time, the managers spoke publicly to the Handelsblatt about how things will continue after the death of the founder. They want to focus more on the entry-level segment and open new McFit studios.
In recent years, Schaller had promoted the expansion of premium brands such as John Reed. “The pure figures suggest that more money can be earned in the discount sector with fitness,” says Müller-Trimbusch.
The industry is still suffering from the consequences of the pandemic, in 2021 the group claims to have made a loss of 47.7 million euros. “If we get to the point at the end of the year where we were before Covid, then we would have taken a big step in the right direction,” says Wingertszahn.
Read the full interview with the new McFit managers here:
Mr. Müller-Trimbusch, Mr. Wingertszahn, you were not only part of the company management, but also friends of Rainer Schaller. How are you three months after the accident?
Müller-Tribusch: According to the circumstances. That was a blow for us that goes far beyond the professional.
Wingert’s tooth: We sort of functioned in the first few days after this tragedy because we had a lot of things to sort out.
Müller-Tribusch: Our daily rhythm has changed noticeably. Rainer was available 24/7 and we spontaneously exchanged ideas even at the weekend or in the evening.
Do you now know the background to why the small plane crashed off the coast of Costa Rica in October?
Müller-Tribusch: We will probably never find out, because there are no flight recorders on small planes. There is no evidence of pilot error or a technical defect. The weather wasn’t exactly easy, but that’s not usually the sole reason for a crash in aviation.
Schaller had managed the company since it was founded in 1997. What does it mean for the RSG Group if the boss disappears overnight?
Müller-Tribusch: The company was shaped by Rainer and the achievements are associated with his face. But it is not the case that the RSG Group would no longer have an existence right after his disappearance. Of course it is clear to us: We cannot replace Rainer – especially as far as the speed of his visionary radiance is concerned. But we can continue the entrepreneurial spirit and be inspired by his visions.
>> Read more: McFit founder was on board the unfortunate jet – who is the man behind the fitness empire?
Wingert’s tooth: We are helped by the fact that Rainer has brought many new employees on board for the upper management levels in recent years and has thus broadened the company’s knowledge. Nevertheless, the company was extremely tailored to Rainer in terms of content and structure. One of our tasks will be to reorganize the structures. In the medium term, we also want to expand the management team.
What is the mood like among the workforce?
Müller-Tribusch: When I had to announce Rainer’s death, I saw 100 crying faces. Many have since recovered. It is now a question of radiating confidence and giving the employees the security that the company will not be without a leader even after Rainer’s death. We are encouraged that the workforce supports our first strategic decisions.
What are these decisions?
Müller-Tribusch: We want to focus more on our core business and profitability again.
Its core business is the McFit brand with 166 studios in Germany. What do you want to change?
Wingert’s tooth: The brand may have been neglected in recent years. We want to focus more on them again and open new McFit studios in our core markets of Germany, Austria and Italy. We are not yet represented in some German cities such as Karlsruhe or Heidelberg. We want to close these gaps. We also plan to modernize existing McFit studios.
“The fitness market only grows homeopathically”
Schaller was the one who established the discount principle for fitness with McFit. Most recently, he tried to break into higher-priced segments with brands like John Reed. Are you turning that back now?
Müller-Tribusch: The fitness market only grows homeopathically and is more of a distribution battle between existing offers. The pure figures suggest that more money can be earned in the discount sector with fitness. With McFit we can easily reach a much larger number of memberships. Nevertheless, we still see it as an exciting field to expand our target groups and not to ignore the premium segment.
Sounds like you’re readjusting Schaller’s strategy.
Wingert’s tooth: In the end it all comes down to the right mix. We have the strategic advantage of serving all fitness segments from discount to premium. In selected cities such as Düsseldorf or in the first district of Vienna, it makes sense to offer studios under the John Reed brand. In most other regions, however, customers are not willing to spend significantly more than 25 euros per month for a membership. We have to accept that.
The RSG Group has a total of 22 brands – including a fashion label and the business with dietary supplements. Do you put that to the test?
Müller-Tribusch: When we talk about focus, we also want to question one or the other. For example, Rainer had a plan for his fashion label that neither of us can bring to life.
Wingert’s tooth: Rainer was a hedonist. He also did entrepreneurial things that he enjoyed – that was his right as the sole owner.
So the side businesses weren’t profitable.
Müller-Tribusch: With dietary supplements you have to do a lot wrong for it not to work. This is also a sensible extension of our value chain. The fashion label is not a logical addition to our core business. And yes, it’s not at the point where the investments would pay off.
“The pandemic has shaken up the industry forever”
The pandemic has been a difficult time for the fitness industry because studios have been closed. How did 2022 go, the first year without major restrictions?
Wingert’s tooth: Basically we are satisfied. But the pandemic has shaken up the industry for good. We have lost some of our members as a result. Most have returned, but under different conditions: before Covid, annual contracts were the norm. Now customers want flexible memberships with monthly notice periods. This means more uncertainties for us.
the standard membership at McFit has become more expensive in the past year.
Experts have predicted the end of many gyms during the pandemic. Don’t many people train permanently on the stepper at home?
Müller-Tribusch: These forecasts were nonsense. The fact that dumbbells were sold out during Corona was a temporary phenomenon because people had no alternative. However, the majority of our customers do not have 80 square meters left at home on which they can set up a cross trainer and equipment park. There may be people for whom a couple of dumbbells is enough – but these aren’t your typical gym-goers.
January is traditionally your strongest month because of the good resolutions. Despite the additional costs for food and energy, do people still have money left over for sport?
Wingert’s tooth: January went even better than the beginning of the year before Corona. Of course, we notice that there is a certain price sensitivity in some regions and with individual customers, but that is not the rule.
“Today the business is tougher”
You too have become more expensive. Last year you increased the standard membership at McFit from 19.90 euros to 24.90 euros, i.e. by 25 percent. Did you take advantage of inflation?
Müller-Tribusch: No, catch-up effects are taken into account. From a purely economic point of view, an increase would have been indicated years ago. But we didn’t want to exceed the threshold of 20 euros, which is important for many customers. Back when we were the pioneers of the industry, we made easy money. Business is tougher today: if the competitor around the corner is two euros cheaper, that makes a difference.
What are your major cost drivers?
Müller-Tribusch: Rent and staff each account for a third of the expenses. Because of the general price increases, rents are going up, and we are also affected by rising energy costs. The minimum wage did the rest.
Against this background, what do you expect for the current year?
Wingert’s tooth: 2023 will be even more challenging. If we get to where we were before Covid at the end of the year, then we would have taken a big step in the right direction.
Then the group-wide net profit of the RSG-Group would again be around 26 million euros. Its sole owner was Schaller until his death. Who owns the company now?
Müller-Tribusch: It remains fully family owned. Rainer’s heirs are now the owners. Being a family business also makes a big difference.
“No one was waiting for Rainer’s job with us”
In what way?
Müller-Tribusch: In a stock company, four or five other managers are available when someone resigns. With us, nobody was waiting for Rainer’s job. Neither for me nor for Hagen was it part of my career planning to become head of the RSG Group.
Sounds more like Schaller hasn’t done any long-term succession planning.
Müller-Tribusch: Rainer was 54 and was full of juice. It was not yet time for him to initiate a succession. In hindsight, one can say that he obviously wasn’t early enough. But who can expect such a disaster? Operationally, we were able to act immediately because Rainer had set everything up well.
We talked a lot about fitness. How often do you exercise?
Wingert’s tooth: I plan to do two workouts a week. I did that last year. I train with John Reed in Berlin and occasionally play tennis.
Müller-Tribusch: Before I came to the RSG Group, I was in the studio every day. Since then I haven’t had the time – and I do sport every day at home.
Mr. Müller-Trimbusch, Mr. Wingertszahn, thank you very much for the interview.
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