Boutique fitness attracts a wide range of investment

London’s growth in both supply and demand for boutique studios has become the fastest growing fitness segment. By the end of October 2018, London had 278 boutique sites with over 400 studios offering 15,806 classes each week. The popularity of this segment, which sets itself apart by offering captivating experiences providing a memorable visit, is detailed in the new benchmark report 2018 London Boutique Studio Report.

 
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The boutique studio trend should come as no surprise as Barry’s, for example, started in West Hollywood, Los Angeles, 20 years ago and other concepts like ‘spinning’ are even more mature. Boutique concepts are not new; London is awash with cool, hip hotels, bars selling craft beer from microbreweries, wine bars specialising in boutique wineries and there’s no end to the number of baristas adding value to the simple coffee bean. People are prepared to pay a premium to have a story to tell; an experience, to understand the provenance and to be part of a tribe.

Boutique studios are cashing in on this movement and the 2018 Report explores the growth since 2011. Details include studio type, number, classes, location, capacity, extra facilities and live links to the social media channels. A breakdown and history of the main boutique styles (HIIT, Mind & Body and CrossFit) are provided along with charts showing the number of weekly classes across all sites.

 
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This is the most fitness-tainment moment London has known in our time and it’s a safe bet to say the research team at LeisureDB are not only the fittest but most well informed on what makes a great experience, after taking classes at every main brand.

This movement couldn’t happen without investment, imagination and some clever mash-up of athletic-wear, fashion, music, some inventive collaborations and design. In London, the investment and co-branding has been on a more British scale with hype and queues to get into classes more muted than NYC and LA. Crowd Funding has helped brands like 1Rebel, BLOK, Core Collective and Boom Cycle, contributing around £10 million towards growth. Investment firms like Codex Capital (1Rebel), Piper (Frame), Encore Capital (Another Space) and Pembroke VCT (Boom Cycle) are some of the early investors with around £20 million committed so far. Private investment from former and current professional boxers and fighters, local and international franchise operations plus industry specialists are fuelling the growth.

After the investment comes the imagination, design and experience which people are prepared to pay for. BXR, a fitness site with boutique studios launched in January 2017, is a passion project for the undefeated boxer Anthony Joshua. It has been experimenting with ‘drop-culture’ to create demand and urgency, a strategy pioneered by streetwear brands like Supreme and Palace. So, drop in to see the next Joshua fight (it was a great evening), to the Selfridges Residency (a pop-up first) and Victoria Secret (shhh, it’s a secret).

BXR, like top end fashion brands, have developed a diffusion line with three studios on a pay-as-you-go basis called Sweat. BLOK is where fitness meets art in seductive spaces. Celebrity endorsements and photoshoots provide global exposure for their cool brand and studios. The legendary Ministry of Sound nightclub and multimedia entertainment business opened London’s first studio fitness nightclub. Located in the club’s previous back-of-house vault, it takes the club-style sound system plus lighting and pairs it with HIIT classes. Digme (named after a beach in Hawaii) opened in London thanks to Geoff and Caoimhe. Number one in the classes league table is Frame, run by Pip and Joan, who are also busy designing their own workout gear, a concept called ‘MumHood’ and an Academy (no wonder they need the occasional Negroni)! Rize, formerly Movers and Shapers, is growing out in the community with three sites. Ten, founded by Joanne, has grown to eight sites with a more intense version of Dynamic Pilates. F45, where no workout is ever the same, has over 20 studios in London with its many devotees. Another Space has three types of classes and doing a combination of all three is the norm now. There are thirty main brands, with two or more sites, featured in the report with unique benchmarking facts and figures on each.

The scale of investment and collaborations in the USA speaks volumes for the ‘can-do’ positive attitude that flows from the west coast. Venture capitalists, private equity firms, family offices, real estate firms, hotels have all developed an appetite for boutiques and seen how new concepts can add value to their existing investments.

Luxury brands are linking with street power brands and collaborations are going mainstream. Louis Vuitton Moet Hennessy (LVMH), who have over 60 prestigious brands, partnered with Catterton, a private equity firm, in 2016. The re-branded L Catterton is one of the largest, diversified consumer-dedicated private equity firms in the world. Three of L Catterton portfolio of boutique companies are named in The World’s Most Innovative Companies 2018 by Fast Company.

Included in the Wellness listing at number 1 is Peloton, for bringing the boutique fitness experience into the home. Number 7 is Pure Barre for stretching the appeal of ballet-based exercise and number 8, Equinox, for breaking further into the luxury wellness industry with its new hotel concept. The Equinox owned SoulCycle is at number 6. L Catterton also have investments in CorePower Yoga, the UK athleisure brand Sweaty Betty and for the cyclists reading this, Pinarello.

TPG Growth is another red-hot investor in this sector and Mark Grabowski joined in 2016 after leaving L Catterton, where he worked on the Peloton and Pure Barre deals. TPG Capital, the main investment firm, owns a stake in USA fitness gym operator Life Time Fitness which it took private in 2015 with Leonard Green & Partners from LA, in a $2.8bn leveraged buyout. Leonard Green & Partners purchased the UK’s largest low-cost brand Pure Gym, in 2017. Grabowski has now spun out of TPG, raised his own fund and partnered with Anthony Geisler to buy Xponential with the idea of curating various boutique fitness concepts under one umbrella. The holding company currently has Club Pilates, Stretch Lab, Cyclebar, Row House, AKT, Yoga Six and in 2017 had almost $150 million in revenue. Cyclebar will be the first brand to open next to the new Embassy of the United States in London’s wider Battersea development this year, while master franchises, will be appointed to expand all brands throughout Europe.

Hotels and real estate companies have been expanding the boutique concept to include fitness. Hilton Hotels, a legendary name in the hospitality industry, is listed number 3 in the Fast Company Wellness listing for building hotel rooms that double as gyms with its Five Feet to Fitness initiative. Hilton have also installed 6 Les Mills ‘The Trip’ virtual studios in the UK. Hyatt Hotels acquired Exhale, a 15-year-old boutique spa concept with 25 locations, in 2017 to add to the Miraval, a provider of wellness experiences, to deliver wellness to guests. Marriott International own the five W Hotels in NYC and have partnered with Swerve Fitness locations at Midtown and Flatiron. Guests get a Swerve swag bag and unlimited rides during the stay. At Swerve you ride in ‘teams’ (Red, Green and Blue) for 45 minutes of rhythm rides bringing indoor cycling and team competition.

 
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Another NYC hotelier, Michael Achenbaum, who’s behind the sleek Gansevoort Hotels, opened the Curtain Hotel and members club in Shoreditch, London, with local developer SUSD, May 2017. In the members club soundproofed live music studio, Boom Cycle (featured in the Report) pop-up opened for members. The pop-up has moved on but as Achenbaum says, “boutique, hotels and fitness, are redefining creativity”.

The Related Companies first Equinox-branded hotel with 60,000 square foot gym and spa will join Related Companies boutique brands like SoulCycle and Rumble in NYC Manhattan’s West Side in a new $25 billion Hudson Yards development, a new model for urban renewal. An interesting aside, Thomas Heatherwick, one of London’s most original thinkers, responsible for the new Routemaster buses in London, the Rolling Bridge at Paddington Basin and the London Olympics 2012 Cauldron, is creating his monumental $200 million artwork ‘Vessel,’ a honeycomb like staircase, to be the focal point for Hudson Yards.

This first comprehensive report on the growth of Boutique Studios in London provides unique insight, with benchmarking, into the fastest growing fitness segment. Copies of the report can be purchased and downloaded here.

Article written by:

David Minton, Founder & Director of Leisure DB

January 2019

Project Fitness UK 2018

UK FITNESS CLUB MARKET POWERS AHEAD AS CONSUMERS EMBRACE HEALTH AND WELLNESS

£5.1bn UK fitness club market achieved annual growth of 7.1%, with strong expansion forecast over the next 5 years.

Project Fitness UK 2018, the definitive new report from Allegra Strategies, reveals the total UK fitness club market serves an estimated 10.2 million members across more than 7,000 outlets, with circa 5% outlet growth forecast over the next five years.
The research was produced in partnership with leading leisure market intelligence specialists Leisure Database Company and leading retail and leisure field experts, The Local Data Company.
Project Fitness UK 2018 states the private sector now makes up more than half of the total fitness club market, with an estimated 6.8 million members across 4,300 gyms.
Property scarcity and low membership penetration among a new generation of value-conscious consumers represent the biggest challenges to fitness club growth. Operators must also respond to tightening consumer spend and decreased investment associated with on-going Brexit uncertainty.


Boutiques pick up the pace as smaller independents feel the burn
Allegra records strong growth in the boutique sector over the last 5 years. The burgeoning segment has successfully innovated beyond the traditional fitness club proposition, specialising in group-based, instructor-led classes. There are an estimated 250 boutique outlets in the UK, with Allegra identifying appetite for further investment in the segment.
As of May 2017, there are an estimated 2,077 independent fitness club operators in the UK according to the Leisure Database Company. A lack of capital investment funds and competition from low-cost operators is increasingly marginalising this segment.
Low-cost is the fastest-growing market segment, opening an average of 75 new outlets and attracting an estimated 300,000 new members every year. With 200 sites and 1 million members, Pure Gym is the UK’s leading low-cost private fitness club chain, followed by Anytime Fitness with 146 outlets and The Gym Group with 130.


Increased health awareness fuels UK growth but north-south prices poles apart
Profound societal changes, such as urbanisation, preventative healthcare and a focus on wellbeing are fuelling growth in UK fitness club memberships. Increasing recognition that exercise is essential to wellbeing is driving the rising popularity of fitness activities among UK consumers. 86% surveyed claim exercise is essential to their wellbeing and 32% state regular exercise is their most important health priority.
Harnessing the UK’s enthusiasm for health and wellness is a key challenge for fitness club operators. While 81% of consumers believe fitness is important, only 39% are happy with their current fitness level and just 23% agree that gym memberships are necessary for staying fit.
The average monthly membership spend across the UK is £29.68, with Allegra revealing substantial regional divide in terms of average monthly membership outlay. Consumers in the South are paying £41.07, nearly twice as much as those in the North at £22.75.


Digital integration and customisation will redefine the fitness club experience
Exercise motivation varies significantly between demographics, highlighting that operators must tailor their approach to products and services rather than adopting a ‘one size fits all’ model.
Key opportunities to hone revenue streams across core growth demographics include digital integration for millennials, holistic healthcare services for older consumers, and innovative group fitness concepts for women.
Technology will increasingly drive growth as operators move towards full-scale digital integration. Adopting new and emerging technologies, such as wearable devices and digitally-integrated equipment, will be essential for attracting new members and maximising membership retention in the coming 5-10 years.


The health and wellness market outlook
Allegra CEO and founder, Jeffrey Young said: “I’m very excited by recent market developments in the health and wellness sector. The fundamentals of the industry remain strong as UK consumers seek to improve wellbeing through the adoption of exercise for a healthy lifestyle. I see positive trends in the long-term and great opportunities for fitness clubs to continue innovating by offering new products and developing their membership propositions.”
Jeffrey Young will present key findings from Project Fitness 2018 UK at the Allegra Health and Wellness Summit, taking place at Balance Festival, 11 May 2018, Old Truman Brewery, London.
The Project Fitness UK 2018 Report is now available to purchase from Allegra Strategies.


Editor’s Notes
Sources

  • Over 100 online and telephone interviews with industry leaders, including CEOs and Managing Directors of major fitness club chains, key suppliers, industry associations and other industry participants (May 2016 – September 2017)
  • Over 7,500+ online surveys with UK consumers (May – September 2017) and in conjunction with Men’s Health and Women’s Health.
  • Desk research including trade press, company financials and online data sources

Allegra Strategies

Established in 1999, and part of Allegra Group, Allegra Strategies is a leading-edge research and strategy consulting firm based in central London. Since 2002, Allegra has published research in the health and wellness sector, supporting companies globally across the health and wellness value chain and adjacent retail, leisure and consumer lifestyle sectors.
Working closely with clients across critical M&A activity, growth strategies, customer segmentation research, global expansion, pricing strategies, and NPD, Allegra analysts are well-placed to answer key business questions and help clients harness their full growth and profit potential.
Allegra Group is the owner and creator of the Balance Festival, UK’s largest celebration of the thriving health and wellness movement, and the producer of the annual UK Health + Wellness Summit. Allegra Group is also the author of the London Wellness Guide.

Free fitness classes in shops are the new trend

Original Article: Independent.IE 

If you’re heading to London for Christmas shopping, there are a few ways to preemptively offset the effects of the Christmas pudding.

In the city of the Thames, sportswear brands like Lululemon, Reebok and Nike are offering free classes to their customers.

Lululemon provides a free yoga or fitness class on Sunday mornings in its Marylebone store in London, for example. Yoga mats are provided.

In Reebok’s Fit Hub in Covent Garden, it offers free evening classes like 'Gymbox’s Badass', 'Hardcore HIIT', and 'Contortion Yoga'.

These brands are expanding their focus and building relationships with their consumer, David Minton, a keynote speaker at tomorrow’s Ireland Active conference, told independent.ie.

"Some of the big brands are getting into fitness and offering it free of charge - people like Nike who are offering free runs. In Reebok, you can join one of their classes in the Fit Hub. Lululemon are offering free classes in their shops and they create studios in their shops. Sweaty Betty is a London brand and are offering free classes," he said.

 
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"This is a new area where the brand is looking to create more of a relationship with the consumer."

How is this impacting the health and fitness industry, Minton asks.

"We don’t know yet because they’re trying to build a direct relationship with the consumer, not just sell them a kit."

According to Minton, the free classes aren’t just getting a big take-up. It’s also the boutique-style, higher end shops and gyms that are going from strength to strength.

"The biggest trend is in boutiques. I’m aware of the advertising that people like Ben Dunne do and how people are trying to provide lots of things for very little money. In London, we’re now going to the opposite extreme, low cost is amazingly successful, for people who are paying below 20 pounds per month. Now just imagine if people are paying 20 pounds per session or more," he said.

"There are new boutiques that are all expanding in the UK.

"They provide night club lighting, night club sound, better look facilities, and top instructors, and you feel you’ve had a top experience.

"Maybe some people are not having the Starbucks and instead having the experience."