Anon Trevor Thompson and Jill Powers resign from Powers Gymnastics

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Anonymous (7242)

Anyone have any more info about this and what it might mean for Powers-owned gyms, if anything at all?

 
I am very interested in reading more about this! I assume it's from the pushback of her buying gyms and cutting programs? Anyway, looking forward to hearing more. Is there an article that can be linked? The one above doesn't have any information (or the "read more" link is inactive).
 
Here is an older thread to help everyone catch up on The Powers Group...

 
From what I’ve heard, there might be some shifts in how Powers-owned gyms are run, but I haven’t seen any concrete details yet.
 
From what I’ve heard, there might be some shifts in how Powers-owned gyms are run, but I haven’t seen any concrete details yet.

Keep us posted please. I have a level 10 at a Powers gym and have been uneasy since they took over a couple years ago.
 

🤨Something is amiss!

Powers Gymnastics had plans to acquire and operate gymnastics facilities, manufacturer obstacle course equipment, and offer gym insurance. Relevance Ventures (RV) backed the namesake, Jill Powers, by funding the strategy with a $17MM Series A round. RV most likely took a controlling equity position and/or had majority vote on the Board (if structured accordingly) with this investment. Powers’/Thompson’s mandate was to cut deals to purchase gyms and implement a business “playbook.”

💰RV had high hopes for elite-level financial returns on their investment:

“Newton [Partner] expects Relevance’s eventual exit will be through a sale to a larger facility operator, like Planet Fitness, or a buyout firm…he compared Powers Gymnastics to Varsity Brands, the cheerleading uniform manufacturer that Bain Capital Private Equity… And if you let it run, you’re going to be big enough to go public with this thing. There is enough (total addressable market) out there where this could be just a gigantic business.”

❓Is the strategy working?

From what I’ve *heard/read* around the G community, gyms that sold have been operated with mixed results. See articles below for more context. Competitive teams were cut or phased-out, while money-making recreation programs were bolstered. Add on ancillary programming — Ninja, Parkour, cheer, etc. — and you should have cash-generating machine.

🧵The stitch

While this makes business sense in the financial models and market-sizing exercises, the reality is Gymnastics is a magnetic sport. Locally, competitive gymnastics teams make headlines, attracting parents’ attention and yet-to-be gymnasts’ dreams. Gym enrollment is rocket fueled every #Olympics cycle. Rec programs act as (profitable) feeders. Competitive teams are effectively a loss-leader for the gym. The important point here is the virtuous relationship.

⛓️💥The breakdown

In venture capital and private equity, when a Board or controlling equity shareholder (i.e. Relevance) doesn’t agree with what’s happening in the business, they have the right/fiduciary obligation to change leadership. Alternatively, leadership may simply resign.

📊 Lacking data on gymnastics facilities

While the G community doesn’t have much data or research on gym operations available, it would be neat to see an intel research/support service offered by USA Gymnastics (or other) to help gyms thrive. Gym owners will attest how hard it is to successfully operate a gym these days.

Looking forward to sharing more as details emerge.
 

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