The Interview looked at the key trends and developments in the boutique fitness industry, examining reopening dynamics and the implications of capacity constraints, as well as the competitive landscape and supply chain ramifications.
Also on the agenda was how real estate has been “slow to react” to the pandemic. Although there is ample availability, landlords are still seeking high rents and “we feel that they’ll be coming down”. This is concerning because occupancy as a percentage of revenue in the boutique sector is a critical element of performance, the specialist explained. Another issue is that some operators have refused to pay their rent while being forced to close, as their contracts do not contain clauses related to an event like COVID-19.
On the technology side, operators are trying to find ways of connecting with past and existing clients. Similarly, exercising closer to home is becoming more important than doing so close to work, with the older population also gravitating to this new norm. Therefore, “I think this is going to affect the urban brands primarily versus the ones in the suburbs, like a Life Time that has a better footprint in the suburbs,” the expert said.
The Interview also discussed how operators are approaching costs and CAPEX cuts due to the current environment, with it being noted that “Q4 is the purchasing season”. Anecdotally, some companies are expecting their spending to drop by about half. Franchisors with strong stipulations on replacing equipment are likely to make allowances for franchisees.
Other areas explored were the market share leaders and laggards, how players such as Peloton can continue to gain share after a COVID-19 vaccine, and what the key metrics are for monitoring this market.
To access all the human insights in Third Bridge Forum’s Boutique fitness industry – North America recovery trajectory & long-term outlook, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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