Smart Fit recently acquired a stake in the Mexican network Sports World

After announcing their plans to acquire the Mexican gym network Sports World six months ago, Smart Fit gave the go-ahead. The company has only bought 10% of the company but could increase its share later. Edgard Corona, president and founder of Smart Fit, has expressed that his firm will assist the current managers to maximize business results and afterward might elect to augment its possession in the shareholding composition. Nonetheless, it is not an effortless job since Corona himself described Sports Word as “old-fashioned Bio Ritmo.” Before it introduced its blueprint of establishing gyms with sturdy equipment, only some teachers were available.

Edgard Corona looked to SmartFit to fortify his premium flag margins, a goal he aims to bring to Mexico. At Sports World gyms, margins are between 15%-20%; however, at Smart Fit gyms, they range from 35%-40%. This investment has provided Corona with a platform of enhanced control and to be more informed on operations while also allowing him the ability to invent unique strategies. According to Edgard Corona, “Being inside the company makes it easier to gain knowledge on how things run and can come up with new plans for the future.”

Even though the pandemic caused some upheaval, it has achieved its 1,000th unit in Latin America. With greater numbers of vaccinations across the region and easing restrictions, Corona expects to reach those figures that originally made the firm gain attention from investors. During April and June of this year’s second quarter, cash movement was negative, meaning their Ebitda (Earnings before Interest, Taxes, Depreciation, and Amortization) totaled -R$13.7 million. According to Corona, openings are reverting to pre-pandemic levels with a goal of 170 more units for 2021 and next year.

Though almost 50% of the operation is located outside Brazil, where interest rates, inflation, and the dollar rate have increased significantly, it remains mainly unaffected due to only 10% of the expenses being dependent on imported devices or equipment. Furthermore, due to franchising options and access to capital upon entering into stock markets, SmartFit maintains its expansion pace unhindered.