James Moore: When fitness chains start to show the financial strain

Outlook Peter Roberts, the chief executive of Pure Gym, boldly stated his company's business model is helping improve exercise levels.

The merger with Gym Group decreed by his private-equity masters is more about improving the health of their bottom line.

It's tough at the bottom. Low-cost providers are not only cheap, they're flexible and don't seek to milk their members through long-term contracts.

However, the popularity of the model has made for a crowded space and the tendons of operators' profitability are becoming strained. Pure Gym boasts that its eschewing fluffy towels and saunas is the secret to its success. But while public sports centres don't offer the former, they often boast the latter and can be cheaper still, contributing to the woes of a sector that should be a gold mine but whose operators always look puffed out.

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