Peloton — the company behind a line of gadget-promoting stationary bikes that enjoyed a big boost during the early lockdown period — has announced layoffs, studio closings and price hikes on its signature product in Canada and the U.S. this monthafter the sharp decline in sales. Another high-end fitness brand is struggling out of home: SoulCycle, the chain of group cycling studios that started in 2006, closed 25 percent of its locations earlier this week. That includes a complete exit from the Canadian market with the closure of its lone studio in Toronto, the company confirmed to CBC News. “I think that explains the kind of popularity at the lower end of the brick-and-mortar fitness consumer market,” said Natalia Petrzela, an associate professor at the New School in New York and author of Fit Nation: The Gains and Pains. of America’s exercise obsession. “More people are coming back to the gym in person, but it’s the lower quality businesses that are thriving.” The fitness industry is between a rock and a hard place, with two previously reliable business models faltering at this stage of the pandemic. While in-person studios continue to recover from government shutdowns, home fitness brands are losing customers as people turn to affordable gyms and fitness centers. A woman walks past a SoulCycle fitness studio in Lower Manhattan in New York City. The group cycling studio chain that started in 2006 closed 25 percent of its locations earlier this week. (Drew Anger/Getty Images)
Small gym owners continue to stand on their own two feet
As pandemic-related measures ease, people are “reevaluating their relationship with what they spend on exercise and why they want to exercise,” Petrzella said. “What Peloton is experiencing is kind of a correction — not even a failure — but a correction to this over-enthusiasm and enthusiasm for fitness at home at a time when so many people had no other options,” he said. The company reported in May that its third-quarter revenue fell short of expectations, taking in $964.3 million, down from the $1.26 billion it raked in a year earlier. Its market value fell by $46 million as demand for home fitness due to the pandemic dried up. “But at the same time people aren’t coming back to exercise the same way they did before,” Petrzella said. “So something like SoulCycle, which has been the darling of the boutique fitness industry, has to adapt as well.” Sergio Pedemonte, CEO of personal training company Your House Fitness, says he’s still struggling to find trainers after a mass exodus from the industry in 2020. (Submitted by Sergio Pedemonte) Even as affordable gym chains thrive, small business owners are picking up the pieces two years later. One of the ongoing challenges is the lack of qualified personal trainers, according to a Toronto-based business owner. “There are too many personal training companies, too many gyms that require trainers, but there are no trainers,” said Sergio Pedemonte, CEO of personal training company Your House Fitness. Pedemonte has home service and a studio and gym. He says he is still struggling to find trainers after a mass exodus in 2020, when many in the industry left to pursue other ventures while CERB payments provided a financial safety net. “I think the biggest struggle of all these mortar companies is this [monthly] The backlog has gone down,” he said, after provincial governments shut down and restricted access to the gym. His business was making about $100,000 in monthly membership revenue when the pandemic hit — a number that quickly dropped to zero afterward. Pictured is Your House Fitness’ brick and mortar studio in Toronto. (Your House Fitness) Sara Hodson, president of the Fitness Industry Council of Canada, said business owners are still figuring out the challenges and changing consumer behavior of 2020. “Look at an industry that closed, that lost all of its revenue, that had to stay afloat and at the same time have to reinvest in technology to do what we can to keep Canadians active,” Hodson said. from Vancouver.
Future business models will focus on mind-body health
The market size of the Canadian fitness industry expanded in 2022 and is now on par with pre-pandemic numbers after a two-year slump, according to market research firm IBISWorld. Petrzella said more consumers have gotten into fitness during the pandemic. “This is a result of the pandemic and the kind of forced sedentary lifestyle that has led many people to realize that exercise is really, really important, both for general well-being and — quite frankly — in terms of some of the co-morbidities of COVID. ” he said. “More people are returning to the gym in person, but it’s the lower-end businesses that are thriving,” said Natalia Petrzela, author of Fit Nation: The Gains and Pains of America’s Exercise Obsession. (Sylvie Rosokoff) Because so many people have invested in high-end home fitness equipment (a basic Peloton setup is priced around Cdn$1,800), most won’t be willing to “charge for a high-end health club or boutique experience,” he said. Hence the eschewing of SoulCycles and Flywheels in favor of GoodLifes and Fitness Worlds. In an industry that yo-yos between trends, Hodson and Petrzela agree that the next phase of fitness and lifestyle branding will remain a hybrid model of virtual and personal connection. “What we’re really seeing across the industry and even when we look at global trends is this massive return to personal connection,” said Hodson, who is also CEO of gym chain Live Well Exercise Clinic. Globally, the fitness industry is seeing a “massive return to personal connection,” said Sara Hodson, president of the Fitness Industry Council of Canada. (Submitted by Sara Hodson) She said she’s noticed that her larger clientele is more open and able to engage in virtual classes as a result of the pandemic, but is also returning to the company’s facilities. “I think the next popular business model will combine connected fitness, personal experience and community,” Petrzela said. “That will likely include meditation, recovery, stretching, maybe even some forms of therapy, frankly, that fit into that mind-body health framework.” “But I think there’s no doubt that connected fitness and home fitness is here to stay.”
