Boots works out how to pump iron

Boots in talks with health club operators about the possibility of building gyms in some of its spare retail space.

Boots in talks with health club operators about the possibility of building gyms in some of its spare retail space.

Fitness industry sources believe that the chemists chain, which has almost 1,400 UK stores, is planning to open its first gyms by the end of the year. However, it is understood that Boots has yet to decide whether to use an established operator to build and run the gyms or whether to do the job itself.

"Boots has been looking to appoint an operator to build up to half a dozen gyms in the next 12 months," one source said.

Fitness First, the quoted chain whose share price almost trebled in the past year, is believed to have been approached by Boots. Another possible partner would be LA Fitness, which has been a stock market success since floating at the end of last year.

Boots admitted that talks with health club operators had taken place but denied that it had any current plans to put gyms in its stores.

If that changes, it would be the latest stage in the retailer's attempts to build a broad health brand offering more than just the health and beauty products with which it is traditionally associated. Boots already plans to roll out a range of new services, including dentistry and chiropody. It has also been chosen to run one of the new NHS Direct centres which will provide the public with immediate treatment for minor ailments. Beauty therapy, massages, manicures, aromatherapy and reflexology may follow.

Analysts believe Boots aims to become a one-stop health shop, with products in the front of stores and services filling empty spaces upstairs and at the back. This would reduce its exposure to health and beauty products at a time when supermarkets threaten to undercut its prices. Wal-Mart, the US chain which acquired Asda last year, is one of America's biggest sellers of pharmaceuticals and is eager to command a similar share of the UK market. Growing competition from supermarkets has undermined Boots shares, which closed on Friday at 493 ¹/2p, less than half last year's high of 1,030p.

Its plan reflects the convergence of its business with that of the health club operators whose services have become more sophisticated. Many now offer personal grooming, physiotherapy and other services as well as exercise machines.