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    Case studies

    Les Mills – Learnings from 50 years in group fitness

    As the world’s largest group fitness provider turns 50, three generations of the Les Mills family tell their remarkable story of struggle, success and striving for a fitter planet.

    Behind every business sits a defining core belief that drives the company forward. For the Mills family, it’s a passion for improving the health of others, teamed with the unyielding competitiveness stemming from their rich sporting heritage.

    “It’s something my dad said when he opened our first club in 1968,” says Les Mills International Managing Director Phillip Mills. “The job of the fitness industry is to help people fall in love with fitness’ and that’s a mission we’re still driven by today.”

    February 5th 2018 marked the company’s 50th anniversary – a rare feat in what is still a young industry. Les Mills started as a tiny gym in Auckland New Zealand has evolved into a global fitness movement, spanning 23 different programmes including BODYPUMP, BODYCOMBAT AND BODYATTACK. Today, Les Mills workouts are licensed in 20,000 clubs worldwide, with a team of 140,000 instructors delivering group fitness classes to over six million people a week.

    But it could have been a very different story. Over the past half century, Les Mills has battled banks, con-artists, hostile rivals, natural disasters and personal demons – all of which have shaped the family-owned and operated company that exists today.

    At the centre of the Les Mills story are three men and three women – split across three generations – whose lives have all been shaped by their elite sporting backgrounds. These are company founder and four-time Olympian Les Mills Snr, his wife Colleen, who also represented New Zealand at the Commonwealth Games and who died in 2005, aged 71; their son Phillip and his wife Dr Jackie Mills MD; along with their two children Diana and Les Mills Jnr.

    Starting out

    The origins of modern group fitness can be traced back to 23 Victoria Street West in Auckland. It was here where Les Snr and Colleen opened their first gym in 1968.

    Overcoming a tough start in life – his father died when he was 11 – Les had become a celebrated New Zealand athlete and hardworking businessman who decided to branch out into fitness. He’d long had a passion for exercise and strength training, stemming back to his early teens.

    “I was fascinated by strength particularly – always have been,” says Les, who at 83 still rides an indoor bike while watching TV and often lifts weights in his garage.

    “So as a boy I sent away for the Charles Atlas course I read about in a magazine. I wanted to kick sand in the bullies’ faces like Charles Atlas did and find a girl on the beach who would smoke cigarettes with me!

    “Then during the sixties, I was in the States on an athletic scholarship and there was a sunrise culture of gyms growing, so I decided to bring it back to Auckland.

    “We found a gym in Auckland which had just gone bankrupt – the American chap behind it was a fly-by-nighter who sold life memberships and ran off with the money – and we bought it off the liquidator for about NZ$3,500.

    Opening on February 5th 1968, Les was confronted with a large line of angry people wanting to workout and refusing to pay any more for the privilege.

    He struck a deal to honour their memberships for a year if they’d commit to the gym beyond that and then set about adding new members to boost cash-flow. The gym started out as a sport-based facility, mainly employing athletes the family knew through competing as staff.

    “We did a lot of circuit training there,” adds Les Snr. “We didn’t have aerobic classes as such, but we ran circuits for the rugby trainers, the rowers, time circuits, just like the circuits you see now.

    “Colleen put a huge effort into getting the gym off the ground and everyone helped with everything. We had to work pretty hard at it and there was no goofing around – times were tough.”

    After a less than auspicious start, the gym gradually began to take off. Further sites were added across New Zealand and Australia, forming the basis of the 12-strong Les Mills NZ club chain that still exists today.

    Strength training was, and still remains, a big part of those gyms, but it was the high-octane group exercise classes which really put them on the map.

    Les and Colleen Mills opened their first gym in 1968 in Auckland.

    Early classes

    Having moved to larger premises up Victoria Street West (where the club remains today), the family converted the original Auckland site into a small group exercise studio.

    “It was very much in the mould of the boutique clubs you see today,” says Phillip, who had returned from an athletic scholarship at UCLA and was on the cusp of the company’s eureka moment.

    “I saw the birth of aerobics in the US and brought a friend from the UCLA track team who had been teaching classes out to New Zealand to help us get it started.

    “I’d just spent a year in the music industry managing a rock band, so we brought in these dancers and actors who were incredible performers to teach classes, plus a lot of elite athletes. This was possibly the first time fitness and entertainment were brought together.

    “We took the old aerobic dance-type classes and transformed them into sports classes with dumbbells and machines for circuits. Jackie and I would spend hours trying out different moves in our living room, to the point where we actually wore out the carpet!”

    “The classes became so popular we were bursting out through the walls of our studio. We built another studio, then another, and a fourth on the roof, but still we were full to bursting. That’s when we thought, we’re on to something here.”

    Fitness meets feminism

    What was notable about these classes right from the start of the 1980s was their appeal to women. Here was an offering that brought women into the gym and opened up fitness to a whole new market.

    For Jackie Mills, who as LMI Chief Creative Officer oversees creation, production and training of all Les Mills workouts, it was a product of a wider societal movement.

    “The 1980s felt like a real-time of revolution for women,” says Jackie, who for many years combined her role at Les Mills with a career as a doctor. “It was a time where women could create their lives with greater freedom and employment opportunities – a time of empowerment.

    “It was group fitness that really bought women to the gym because women really liked the social aspect of working out in groups, while developing physical strength was another aspect of the movement.”

    Boom and bust

    As the classes took off with both sexes, Les Mills began to license them for use by other clubs, first in New Zealand than in 1981 in Australia.

    Continued growth saw Les Mills go public in 1984, while a 1987 investment company buy-out enabled Les Snr and Colleen to divest and pursue new adventures. And then it all went badly wrong.

    One month after the takeover, the 1987 financial crash wiped out the stock market and left Les Mills’ new owners in financial ruin. Having stayed in the business with a small shareholding, Phillip was thrust into buy-back talks with liquidators in a bid to save the family firm from oblivion.

    “I was in my early 30s with a young family, looking at a loan NZ$10m to save the business – a hell of a lot of money back then,” recalls Phillip.

    “It was a scary decision and a big gamble, but the family name was above the doors and I wasn’t about to let it shut.”

    Through a loan from the liquidators and the sell-off of Les Mills clubs in Australia, Phillip took charge and the company was saved. But despite Phillip and Jackie’s bold vision for a turnaround and their gift for group exercise programs, the tough times continued.

    With the business heavily in debt and banks unwilling to back a niche fitness concept, Les Mills spent six years struggling to pay wages and keep the lights on.

    Phillip says: “By ’93 I was so burnt out that I’d become pretty depressed. I’d put on weight, wasn’t exercising and it took Jackie to grab hold of me and say ‘Philly, you’ve got to get a grip.’”

    “So I set myself some goals and one was that I was to make my way up to A-Grade tennis. Of course, I never made it past the Whangarei Open, let alone Wimbledon, but within a year I lost 15 pounds, the depression lifted and the business started to turn a corner.”

    Going Global

    Having spent decades honing its standardised exercise programming and teacher training system, the easing of the debt mountain meant Les Mills could once again dare to dream globally.

    An Australian partnership with a national swim coach and Canberra gym owner Bill Robertson led to the development of the model that took the licensing business worldwide. In 1997 Phillip founded Les Mills International (LMI) as a separate company from the Les Mills NZ gyms, to focus on the global licensing business.

    But once again, things were far from straightforward. Having underestimated the required levels of investment, LMI soon started to look like a bridge too far.

    “What we thought would cost us NZ$10m a year to make a success, ended up costing NZ$100m,” says Phillip.

    “We badly underestimated the scale of the challenge at the start and actually LMI lost money for its first eight years.

    “Having to some extent, nudged my dad out of the business before, I had to ask the old man to come back and help us steady the ship.”

    Having recently concluded an eight-year term as Auckland Mayor – one of many colourful career choices that have included Coach, TV Commentator and National Sports Director for Papua New Guinea – Les Snr returned, bringing with him Jill Tattersall, who became LMI chief executive from 2001 to 2010.

    “I’d just lost re-election as Mayor and when Phillip called I thought ‘hang on fella, you don’t have to offer your dear old Dad a job just because he’s out of one,’” jokes Les Snr.

    “We needed to free up Philip’s creative genius, so he could develop the products, programmes and all the magic. Jill took over the nuts and bolts of the management and I scooted around the place doing contracts and trying to sign the Germans and the French up.”

    Inch by inch, the Mills family put LMI back on track and by this point, it had become clear that there was an insatiable appetite among club members for these fresh new workouts from New Zealand.

    Appealing to both sexes was no doubt an important breakthrough, but that’s also been true of many other workouts since, so what is the secret behind the huge popularity and longevity of Les Mills programmes?

    The Secret Sauce

    “I think for class participants, the appeal is that the programmes deliver great results, create incredible energy and they stay up to date with the latest moves and music,” says Jackie.

    Staying ‘up-to-date’ requires each of the 23 Les Mills programmes to be updated every three months with completely new choreography, music and instructor training.

    The Programme Directors scour the globe for the latest learnings, trends and ideas to feed into this creative process. They also listen to hundreds of hours of music in search of the hottest tracks and then it’s the job of the Music Licencing Team to gain permissions from the record labels, or Les Mills Music (the biggest employer of New Zealand musicians) will create cover versions or an original composition.

    “We’re always very open about what it takes to put our programmes together as it would be very tough to replicate,” says Jackie, adding that science is the real cornerstone of the results.

    “Our Head of Research Bryce Hastings works with leading academic institutions like Penn State University to make sure all Les Mills classes are independently-tested and this data is used to produce peer-reviewed studies published in academic journals.

    “The research insights are harnessed by a team of experts to devise safe and effective choreography for Les Mills programs, which are then screened through thousands of hours of in-club trialling before being released to the wider market.”

    Leading club owners on the Les Mills legacy

    What's so incredible is they're constantly reinventing themselves, and that's the key to success to any great company –staying true to the core business while being committed to change. Constantly creating new programmes and then every quarter launching new programmes within the programmes, there's a constant evolution, a constant focus on change. Which is very challenging to do, and they've been very successful at it.

    Lynne Brick, President and Founder of Brick Bodies

    There isn't another brand that even comes close to what Les Mills offer. People who teach Les Mills are very passionate about the brand and what the brand stands for – there’s such a high level of expectation. And I think that's where the value is, through the integrity of the brand. People love Les Mills, and they love to teach it, and once members or staff had had a chance to get involved in that brand, they will never leave it.

    Geoff Dyer, President Crunch Fitness West Florida/Orlando/Atlanta

    For 15 years I’ve always been so impressed with they do – by how much thought and attention goes into the programming. Les Mills is really driving, to a large extent, the acceptance of virtual around the world. They're delivering really good programming, and I think that we club owners are totally appreciative of that. I can only assume it's going to keep getting better and better.

    Steve Schwartz, President and CEO of Midtown Athletics Clubs

    Their global success has everything to do with Philip and Jackie, and now more recently their children. I think their passion for doing programmes brilliantly every time, for spending what it takes to do it right as well, has allowed a smallish company from a smallish island nation to really own the programmed group exercise market around the world.

    Frank Napolitano, President of 24-hour Fitness

    We now have almost 400 clubs and Les Mills classes have been a key part of that growth. They brought people to us, they made people trust us, they gave them enjoyment. We have seven different Les Mills classes in an average club. People really like the variety and they really like the quality and the music and the instruction. As for my instructors, you know they've got Les Mills tattooed on their derrieres, right? They really love the system!

    David Patchell-Evans, founder and CEO of GoodLife Fitness Clubs

    Power of Instructors

    One of the most important ingredients in the Les Mills formula is the people who deliver the classes. With an army of over 140,000 instructors worldwide, people, training and processes are pivotal to ensuring a smooth transition of programmes from Auckland to club studios.

    According to Phillip, the instructor training side of Les Mills is actually loss-making. He says the commitment to maintaining high standards of instructor (by setting a high bar) and providing them with affordable training options is what necessitates the license fee that clubs pay.

    As LMI Creative Director – and Programme Director and Presenter for some of the company’s biggest workouts such as BODYPUMP, BODYCOMBAT AND RPM – Diana Mills believes it’s vital Les Mills is instructor-led in its approach.

    “Instructors are the absolute heart and soul of Les Mills and our focus has to be their security and happiness.

    “It’s really powerful to witness the passion they bring to their roles. These people are a true inspiration.”

    But the company hasn’t always got it right with instructors. Diana admits that lessons have been learned from appearing too corporate and less of a people business, so the focus has shifted to speaking to people on a human-to-human level.

    “We’re trying to be honest, open and direct with instructors,” adds Diana. “And we’re really listening to a lot more to what they want, to make sure they feel part of this enormous family.

    “I think that’ll be a challenge for everyone, as every business is going to become more digital and less human. It means we all need to focus on connecting back as people.”

    Millennials and More

    Aside from trying to stay true to an army of thousands, staying ahead of the latest trends has been another major challenge for Les Mills.

    Despite its reputation as a group fitness pioneer, the company was in desperate need of a refresh by the end of the noughties. And it took a few home-truths from Phillip and Jackie’s children to realise it was time for a shake-up.

    Phillip explains: “It was Les Jnr who came to us and said ‘Hey, your stuff is tired and doesn’t work for our generation. We’ve got to change it up.’”

    “It was a big wake-up call. Les and Diana play a huge role in the business and they’ve really led the charge in making sure we appeal to millennials and Gen Z – something that the industry as a whole has struggled with to date.”

    Tasked with breathing new life into the programme portfolio, Les Jnr – who is LMI Creative Director of Millennial Programmes – set about what he calls ‘inclusive evolution’. This meant refreshing the Les Mills brand to appeal to younger markets while forging stronger ties with those already connected to the brand.

    Paying particular focus to music, intensity and length of sessions, the resultant new programmes – GRIT and THE TRIP – were unlike anything Les Mills had produced before.

    Launched in 2012, GRIT ensured the company was well-placed for the fledgeling HIIT boom, covering all bases with three distinct varieties: Strength, Cardio and Plyo. But it was with THE TRIP that Les Jnr really took Les Mills into uncharted territory.

    An Immersive Future

    Teaming up with his friend Adam Lazarus, the pair created an entirely new category of workout, dubbed ‘Immersive Fitness’.

    Les Jnr adds: “We loved projection mapping and the light shows you see during live music shows, so we wondered if we could bring these elements into a group fitness environment.

    “After several years of R&D, we landed on THE TRIP – a fully immersive indoor cycling experience where we project virtual worlds onto the walls of the studio.

    “This makes for an incredible sensory experience led by music, beat-driven visuals, mind-bending landscapes and a highly effective workout!”

    As anyone who has tried The TRIP will attest, it’s an incredible cinematic experience. However, many clubs were initially deterred by the high A/V set-up costs associated with the system.

    Has the programme’s popularity lived up to expectations?

    For Phillip, THE TRIP represents the future of fitness. But he says the company made tactical errors in bringing it to market which has since been rectified.

    “We let perfect get in the way of good by insisting that clubs adopted expensive A/V set-ups with huge screens to benefit from the full experience,” he adds. “That meant a US$100,000 install costs which is out of reach for a great deal of clubs.

    “But we’ve learnt from that, created a range of more affordable options for clubs and the price of technology has come down considerably. THE TRIP’s really starting to take off because it’s the most powerful fitness experience that a club can offer.”

    A Virtual reality

    In Phillip’s eyes, the industry’s biggest battle is continuing to appeal to young people at a time when the average age of a traditional club owner can often be 60 to 70. Here he sees innovation, both in content clubs provide and the way it’s delivered, as being vital to bringing more of the millennial and Gen Z demographics into the club setting.

    “As technology and members’ expectations constantly evolve, clubs that can offer members exciting workouts when they want, where they want, will stand out,” adds Phillip.

    “We see Virtual as a massive opportunity for clubs to make better use of their studios during off-peak times and introduce more members into group fitness.”

    As well as ramping up it studio offering with a range of new Virtual programme, Les Mills is also taking this content into the cardio equipment area of gyms. New indoor bikes specially-developed with Matrix Fitness and Stages Cycling were unveiled at IHRSA and FIBO. They feature on-bike screens allowing users to join in with Virtual classes – a sort of in-club answer to Peloton.

    But it’s the in-home solution Les Mills On Demand (LMOD) which has raised most eyebrows. The ‘Netflix-for-Fitness’ platform has been positioned as a means for clubs to reach beyond the four walls and engage members even when they can’t make it to the gym. Meanwhile, profits from the subscription fee (approx. US$12.99) that members pay are shared with the club.

    Could this mean members no longer need to visit their club? And does it signal a shift away from the live classes that have made Les Mills famous?
    “Absolutely not,” says Phillip. “Live workouts will always be the pinnacle and nothing can replace that. It’s like the music industry – people today love consuming music in a variety of different ways, but live music is more popular than ever.

    “Whether it’s a Body Coach video on Youtube or the old Jane Fonda tapes, people have always worked out at home as well as in their club. LMOD means clubs can be that conduit and support members in maintaining the habit of exercise, so they’re less likely to quit.

    “This is all about using technology to grow the market, reach new audiences who consume content in different ways, and ultimately drive people towards the unbeatable thrill of a live class in their local club. Already, we’re seeing about a third of LMOD users migrating to their local clubs.”

    2020 vision

    Growing the category will be key for Les Mills to make good on its bold 2020 Goals. Putting hard numbers to its vision of A Fitter Planet, the company aims to provide 20 million live workouts a week by 2020 and reach a valuation of NZ$1bn.

    “The money’s not important to us, but it gives you the means to develop the organisation to do the things we want it to,” adds Phillip, acknowledging the many struggles and mishaps that have accompanied the family’s successes.

    Citing a ‘catalogue of Les Mills failures’ – a global PT licensing business, several clothing firms and three separate nutrition companies have gone under during the family’s 50 years in business – Phillip says it’s vital to have that cash flow available if it is to continue pushing the boundaries.

    “We’ve made more mistakes than I care to count over the years, but you take your chances, you learn from them and you go again.

    “Ultimately, a rising tide lifts all boats and we’re focused on working closely with our club partners, harnessing technology to grow the market and ensure everyone benefits from a fitter planet.”

    A social mission

    Corporate social responsibility and activism have always been a strong part of Les Mills’ identity. The company has donated millions to green charities and political causes, while last year it partnered with Unicef to raise over a million US dollars to improve water, sanitation and basic hygiene in East Africa through the ‘Workout For Water’ campaign.

    The company sees a strong link between the physical and environmental health of the planet, and this formed the basis for the 2006 book Fighting Globesity. Co-authored by Phillip and Jackie, the book highlights the complex links between exercise, diet and the environment, making a cogent argument for policy and social initiatives that could hugely reduce the preventable conditions blighting global health systems.

    “A Fitter Planet means not only the fitness and health of its citizens but also the planet itself,” Jackie explains.

    “As a company, we’re true greenies and believe that every individual who becomes healthier can help create a ripple effect in their community. Our industry has such an important role to play in driving this.”

    Brand legacy

    As for who will be driving the Les Mills mission forward over the next 50 years, it seems fairly certain to remain a family affair.

    Phillip and Jackie have no plans to retire any time soon, but both seem sure Diana and Les Jnr will pick up the reins at some point in the future.
    “Our kids are going to drive it forward, they’re already playing very senior roles in our company and leading the way with creativity, music and intensity,” says Phillip.

    “And their kids too are showing a sign of being interested – it’s nice to have some certainty around family driving forward the future of the company.”
    Ours is a great story, but so often in our journey, it’s felt like it could end in disaster. To be honest, I’m still not sure how it’s all going to end. I guess that’s what drives us on…”

    This article first appeared as the cover story in the June 2018 edition of Health Club Management magazine.

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