With the steady lifts in local mandates and gradual increases in COVID vaccinations, the industry is seeing more fitness concepts returning to a steady state of normal. A caveat? The delivery of fitness to the consumer is evolving. As a result of the pandemic, it has become more than just a brick-and-mortar fitness studio and more than just a 30-60 minute workout. Not to mention the talent, especially in states where closures were longer than expected, has moved beyond the fitness center. To open the discussion, a few of our top-of-mind expectations for the boutique fitness industry over the next 12-18 months include:
IHRSA’s recently conducted study showing that 94% of gym-goers plan to return to their normal routines once gyms reopen with less restrictions is gradually coming to fruition. More vaccinations will result in more confidence and comfort gym-goers will have to return back to their routines.
Fitness operators will need to get creative in attracting (and re-attracting) top talent that were forced to find alternative sources of income during the temporary closures.
Fitness operators are looking for sustained models of omnichannel programming as office environments are now shifting to hybrid solutions of in-office and at-home, allowing for more flexibility in consumers’ schedules to attend various types of fitness programs.
Consolidation amongst the more established (and more financially stable) operators to support and potentially acquire the ‘smaller’ businesses.
Impact of COVID in Boutique Fitness
Let’s take a closer look on the impact of COVID-19 in the boutique fitness industry. Towards the end of 2020, approximately 20% of gyms had permanently closed and the industry lost over $15 billion in revenue and cut over 480,000 jobs. Gold’s Gym, 24 Hour Fitness, and Town Sports International all filed for Chapter 11 while Flywheel filed for Chapter 7 and closed all of its studios.
Barry’s Bootcamp was quite creative during COVID with the launch of “Barry’s At Home” and selling their fitness equipment kits. They also introduced online cycling classes and it’s stated that during COVID, over 140K of their members took their digital classes every week through 2020. We’re not concerned about their potential to meet their 100 new location growth projections.
Impact of Digital and Connected Fitness Penetration
What was the impact on digital and connected fitness? COVID-19 accelerated the adoption of a hybrid model of online/in-person workouts with 72% of fitness club owners now offering on-demand and livestream group workouts, which is up 25% from 2019. While the digital and connected fitness adoption rates have quickly increased, we believe that the industry can never truly replace the in-person or in-studio experience completely. Online fitness has been a savior for both fitness businesses and their members through 2020, and the digital fitness market will continue to grow long after COVID. But at the end of the day, boutique fitness is about more than exercise. Members are paying for a unique and engaging social fitness experience - something that can never be fully recreated through a tablet or laptop screen.
A Few Highlights from the Health and Wellness Space:
Equinox Group is in talks to go public via a SPAC headed by Chamath Palihapitiya
Planet Fitness made a minority investment in iFit
Nestle Health Space acquired Nuun from TSG Consumer Partners
Tempo has now raised $300M to date with a recent $220M Series C led by SoftBank
The Honest Company filed for an initial public offering
Overall, times are still changing and we're all just learning - and growing - along the way. Have any thoughts? We'd love to hear it. 👋 Drop us a line via firstname.lastname@example.org