Gym Giant Smart Fit Navigates High Interest Rates in Latin America
Latin America's largest fitness chain, Smart Fit, balances aggressive expansion with high borrowing costs as double-digit interest rates pressure regional retail.
For global investors holding consumer-facing assets in emerging markets, the cost of capital is rapidly redefining how businesses scale. While the Federal Reserve's monetary policy path shapes domestic portfolios, international corporate balance sheets are grappling with local central bank rates that make capital-intensive growth a high-stakes balancing act.
Nowhere is this tension clearer than in Latin America's fitness sector. Smart Fit, the region's largest gym network, has grown into a massive regional footprint with 2,170 clubs across 16 countries as of late 2026. Yet, even as consumers flock to its low-cost, high-value locations, the company is hitting a macroeconomic wall built of high borrowing costs.
In an interview with Money Times on October 14, 2026, Smart Fit Chief Executive Officer Diogo Corona pointed to double-digit interest rates as the primary external headwind squeezing the retail and fitness sectors. With Brazil's Selic benchmark interest rate hovering at 13.75% in late 2026, Corona warned that launching new projects in an economy where the cost of money approaches 15% is increasingly difficult because new investments must clear an exceptionally high hurdle rate to remain viable.
Despite these financing headwinds, the fitness giant's underlying business model has shown notable resilience. In its Q2 2026 earnings report released on August 6, 2026, Smart Fit posted a record earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 32.7%. This profitability milestone was supported by a 22% year-over-year surge in net revenue, which reached 2.2 billion Brazilian reais ($398 million).
To sustain its momentum without overextending its balance sheet, the company has begun adjusting its expansion tactics. In September 2026, Smart Fit entered its 17th country, Venezuela, but chose to deploy a franchise model rather than building company-owned clubs. According to Corona, this asset-light franchise approach allows the brand to capture early-stage market share while mitigating local political risks and conserving capital in a high-interest-rate environment.
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For retail investors looking to track Latin American consumer trends, Smart Fit is listed on the Brazilian B3 exchange under the ticker SMFT3. While there is no direct US listing for the gym chain, global investors can gain exposure to its parent and institutional backers through US markets. Brazilian private equity firm Pátria Investments, which co-controls Smart Fit and holds a 30.1% stake in the company, is listed in New York on the Nasdaq exchange.