Armah to Open 9 Clubs by 2026

Fahad Alhagbani, CEO of Armah Sports Co., announced that the company is moving forward with its growth initiatives by planning to open two new clubs in Jeddah by 2025, alongside seven additional clubs currently under construction and expected to launch in 2026.

This demonstrates the company's rapid expansion aimed at increasing revenue and growing its subscriber base, Alhagbani told Argaam.

He stated that Armah aims to address its accumulated losses and convert them into retained earnings this year, showcasing ongoing financial performance improvements and a promising profit growth outlook.

Rather than restructuring its loans, the company renegotiated existing financing agreements. This led to reduced interest margins, which, in turn, positively impacted the company's income statement.

Because of this, the firm reported a one-time profit gain of SAR 4.5 million in 2024, in compliance with the IFRS9 accounting standard.

Discussing financial performance, Alhagbani highlighted that the company's profit increased by 314.9% in the second half of 2024.

This significant growth was attributed to key contributors such as a 92.2% rise in revenue and a 121.2% improvement in gross profit margin.

He credited this growth to an increase in subscription and personal training revenue, a growing subscriber base, and the opening of new clubs.

These elements reflect Armah’s ability to successfully boost revenue and enhance operational efficiency, driving significant profit increases.

Alhagbani added that the improved gross profit margin was a result of cost reductions and better operational practices.

Subscriber demand grew significantly, with active member numbers reaching 36,000. Some clubs reached capacity, leading the company to pause monthly subscriptions in certain locations to prioritize delivering a premium customer experience.

The 92.2% revenue growth during the second half of 2024 was driven by two main factors. First, three sports clubs achieved operational maturity, contributing to revenue as they operated for a full 12 months in 2024 compared to less than six months in 2023.

Second, growth came from expanding the network with four new club openings in Riyadh and Jeddah, further enhancing revenue streams.

Alhagbani also revealed that three "Optimo" clubs stopped taking new subscriptions in July 2024 due to reaching maximum capacity, with waitlists now established.

Similarly, some monthly and quarterly subscription plans at "B-Fit" clubs were discontinued, with the focus shifting to 12-month plans to effectively manage subscriber volumes and ensure better customer experience.

On personal training, Alhagbani emphasized the company’s commitment to improving service quality by hiring certified and experienced trainers, which enhances the customer experience and supports members in achieving their fitness goals.

Regarding pricing, Alhagbani explained that Armah adheres to a unified pricing strategy, ensuring equal service levels for both male and female members.

He noted that the company does not differentiate between genders when analyzing performance or growth metrics but instead focuses on overall performance indicators and sustainable subscriber growth.

Addressing plans to move to the main market, the CEO mentioned that this is part of the company’s long-term strategy but depends on regulatory and board approvals.

A decision is expected to be announced by late 2025 or early 2026, aligning with the company’s growth plans and its objective to strengthen its presence within financial markets.

Currently, the management team is concentrating on executing expansion plans, launching new projects, and securing strategic locations, with the goal of operating 29 sports clubs by 2027-2028, Alhagbani concluded.

Source: argaam

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