As clients shed pounds, the gym puts them on

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Fred Turok started his working life as a physical education teacher in inner- city London schools. He taught for six years and became a head of PE, earning under £7,000 a year.

But now he spends much of his time behind a desk. He is chief executive of LA Fitness, the London-based chain that has 37 fitness clubs throughout the country and more than 80,000 members. His 20 per cent stake in the business makes him a multimillionaire.

"I gave up teaching because I was frustrated by the education system, which was becoming bureaucratic. My paperwork has always been a disaster and I wasn't prepared to become a paper-pusher."

Now 46, Mr Turok first became involved in sports clubs to supplement his teacher's salary, giving swimming lessons part-time at a local centre. In 1985, he was taken on by the fitness entrepreneur David Lloyd and launched the Riverside Club in Croydon. He ran the club for five years but then decided he wanted to own a centre himself.

Mr Turok, who is married with four children, took out a second mortgage on his home and bought the Westminster Healthclub in Victoria. Within a year he had turned the loss-making club into a fitness centre posting a £130,000 profit.

"I made it profitable by selling membership, investing money and giving great service, such as classes and private training. My wife and I used to clean that club after work and at the weekend," says Mr Turok, who worked around 80 hours a week when he was setting up the company. His wife Sue ran the administrative side of the business for the first five years.

The group became LA Fitness in 1996 when Mr Turok bought the original LA Fitness club in west London – the centre where surreptitious pictures were taken of Princess Diana, provoking a boycott by customers. As a result, Mr Turok was able to buy the club cheaply.

LA Fitness has expanded rapidly and the group's target is to own 78 clubs by 2003. As part of a European expansion plan, it is set to open its first centre in Spain (in Barcelona), at the beginning of next year. The immediate aim is to have eight clubs in Spain in the next couple of years.

Germany, Belgium, France, Italy, Portugal and the Netherlands are also target markets, but the roll-out will be slow and controlled and will happen only when the formula is a proven success, says Mr Turok.

The company has also focused on its financial health. It floated in October 1999 at a share price of 180p and a valuation of around £10m. The shares were trading last week at around 292p, not far off their year high of 323p, and the business is now worth £115m. It is expected to post a full-year profit of £5.4m on turnover of £28m when it reports in September.

Above all, LA Fitness has benefited from the public's appetite for keeping trim. It has swimming pools, saunas and steam rooms in most of its clubs, is doubling in size each year and could flex its financial muscle. "We always look at acquisitions, but as we grow organically, we don't need to [take action]," says Mr Turok.

"We are offering more than just fitness," he adds. "We are moving now towards a holistic approach. Fitness will be just part of the circle."

The company aims to generate extra revenues through services such as private training and corporate membership. It has an initiative called LA Primetime to encourage the over-55s to join the clubs and last year launched a ClubZebra channel on interactive television with the private healthcare group Bupa. The TV channel takes exercise routines into people's homes.

As for Mr Turok, the man who hated paperwork now runs a firm with over 1,000 employees. But he hasn't forgotten everything he did at school: he takes aerobics lessons twice a week. "I teach it because I enjoy teaching, it keeps me fit and it keeps my hand in to see what the customers want."