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Fitness clusters emerge in US malls

Wellness-based retail enterprises are entering the spaces formerly inhabited by apparel, books and electronics stores.

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Fitness clusters in urban settings pop up organically, because no one landlord owns all the property.

New York

A VISIT to an upscale suburban mall or a city shopping district used to be marked by stops at Gap, Sharper Image and Barnes & Noble, ending in a pile of shopping bags.

Now it is about taking a US$36 Pilates class, maybe followed by a US$36 indoor cycling session if you are really committed, then hitting the organic market to slam a US$10 coconut water before making a quick stop for US$40 cryotherapy.

That was what I did this month at Rye Ridge shopping centre, an outdoor mall in Rye Brook, New York, which houses - among the typical Starbucks, chemists, delis and clothing stores - a profusion of boutique fitness and wellness-based retail enterprises almost as concentrated as the electrolyte level in the coconut water (which, honestly, I skipped).

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It is reflective of boutique "fitness clusters" around the country that have emerged in suburban shopping developments and gentrifying city neighbourhoods. These new storefronts are rendering the old concept of "mall walking" absolutely antiquated, if a comparative bargain.

Had I timed my day right, I could have also done hot yoga (US$28), taken a high intensity interval treadmill class (US$34) and sat in a detoxifying sauna for 30 minutes (US$30).

As brick-and-mortar retail stores have taken a beating from the Internet, yoga, Pilates, rowing, boxing, cycling, barre and high-intensity interval training (HIIT) studios are entering the spaces formerly inhabited by apparel, books and electronics stores: catering to a consumer class seemingly more interested in investing in the shape of their bodies than the clothes that cover them.

Taking a group fitness class, it turns out, is one of the few things that you cannot order from Amazon. These studios now make up a big part of what has been called the "experiential economy", after the "experience economy" - a phrase coined in Harvard Business Review by Joseph Pine II and James Gilmore 21 years ago, but amplified to the max by the more recent advent of Instagram selfies.

I visited the mall in the suburbs at the suggestion of Amanda Freeman, the founder and CEO of the Pilates-inspired SLT (for Strengthen Lengthen Tone) fitness company. I went to SLT classes when she opened her first studio, in midtown Manhattan, eight years ago. The company now has 24 locations in New York, New Jersey, Connecticut, Pennsylvania and Michigan.

Ms Freeman said that when opening a new studio, she sometimes looks for real estate near other boutique fitness studios. A customer who passes by SLT on the way to another such exercise class is already used to paying US$35 or US$40 a pop. And there is the potential for the "restaurant effect", which is when a row of eateries becomes a dining destination for customers who may want Italian one night and Thai another.

"If I'm opening a new location, I want to open where a comparably priced studio is already thriving by offering a different workout," she explained. "What I don't want is to open near a US$20 a class yoga studio where people are going to ask why is your studio US$40?"

AEROBIC ANALYTICS

Five years ago, Ms Freeman jumped at the chance to open on the fourth floor of a building on Third Avenue and 67th Street in Manhattan. FlyBarre, which offers an "ultimate total body burn" floor workout for US$36, is on the second floor. Flywheel, the indoor cycling studio that sells single sessions for US$36, is on the third. And Fhitting Room, a US$38 a class high-intensity training studio, is on the fifth. "Co-location creates a fitness community," she said. "Plus you can play the music as loud as you want and no one cares."

There is an art and a science in determining locations for boutique fitness expansion, said Joey Gonzalez, the CEO of Barry's Bootcamp, a full-body treadmill and weights workout studio with 58 locations in nine countries including Australia, United Arab Emirates and Norway. (Depending on the location, classes cost US$30 to US$36.) The process starts with listening to existing and future customers who post to social media and e-mail with requests for a Barry's in their neighbourhood.

For international locations, they home in on cities that have already found locals and expatriates who are embracing boutique fitness. Then Mr Gonzalez will find partners in those cities and let them guide the search for the right spot. This is how Barry's ended up in Raffles Place in Singapore. It will open in the fancy Golden Triangle neighbourhood of Paris this month.

When scouting for new spots to open in the US, Mr Gonzalez relies on demographic data from Esri, a location analytics company. Looking at household income, education and age, Esri's software helps Barry's find the demographic groups that make up its customer base, with names like "Urban Trend-Setters" and "Laptops and Lattes", he said. Barry's will open soon in Charlotte, North Carolina, Philadelphia and Houston.

Fitness clusters in urban settings pop up organically, because no one landlord owns all the property, said Jeff Weinhaus, president and chief development officer for Equinox, the luxury fitness club brand. In suburban shopping developments that usually have a single owner or management company, the mix of fitness and wellness studios needs to be "carefully curated", he said, or "they seem contrived".

Landlords are game for these fitness tenants, said John Klein, a former real estate executive for Equinox who now runs a consultancy focused on the wellness, retail and apparel industries (and trendy businesses like the Wing). "Boutique fitness is a lifestyle habit for millennials who like self-care and have a solid disposable income," he said. It attracts foot traffic from people wearing expensive shoes.

But wait. Weren't companies like Peloton (US$2,245 bike, US$39 per month subscription, US$125 shoes; recently filed for an initial public offering) and the Mirror (US$1,500 looking glass, US$39 per month subscription; advertised in subways and on Facebook) supposed to revolutionise the way that we worked out?

Not so, say those in the boutique fit biz, reasoning that people who invest thousands in at-home hardware are either new to fitness or are hard-core fitsters looking to supplement their workouts.

Besides, you cannot stream real life companionship. "Peloton is trying to sell community via technology but it does not have the same energy of the group experience," Mr Klein said. "There is no one to go out for coffee" - or coconut water - "with after."

CREATING A NEW NICHE

All the overexercising is creating a new niche for entrepreneurs and landlords: wellness studios focused on recovery from muscle soreness, fatigue and - perhaps - hangovers. In Los Angeles, places like Pause Studio sell float therapy ("for the bodies of athletes & office warriors alike"), IV drips and sauna sweat sessions. (Earlier in the month, customers were treated to free vitamin B shots.)

In New York, Ms Freeman and a partner last year opened Stretch'd in the heart of the Flatiron district, a Manhattan wellness hub. One-on-one sessions range in price from US$45 to US$135. There is also StretchLab ("the leader in customised flexibility services"), which offers individual or group stretching, with more than 20 locations in places such as Jacksonville, Florida and Denver. (Let us also take a quiet moment to reflect on boutique mental fitness - aka meditation studios - MNDFL in New York and Unplug in Los Angeles, where guided sessions of sitting quietly cost US$24.)

"This is what's coming next," Mr Klein said. "It is leveraging off people who are beating their bodies up every day," as well as work warriors who brag about long hours on the job. Some fitness entrepreneurs are going for the whole decathlon of contained group athletics.

Anthony Geisler is the CEO of a company called Xponential Fitness which owns boutique studio brands in eight categories, including yoga, Pilates, indoor cycling, rowing and barre. He looks for small studios that are being poorly run by people who are good at fitness but not finance, and then franchises them. Many of his franchisees have bought several brands. Someone may own a Club Pilates, a Pure Barre and a Row House, for example. He and his executives provide them with help finding locations and negotiating leases.

Nicole Mereshensky is the kind of customer all these businesses are clamoring for. Ms Mereshensky, 39 and a mother of two in New York, takes a boutique fitness class about six times a week. "I'm into taking classes," she said, "because I want the group energy and I like people telling me what to do." She prefers a studio within a mile of her apartment. She likes to walk to the class to get a little extra exercise. NYTIMES