Consumers love a great gym deal but, in 2016, there is a business model posing quite a threat to large established gym chains: emerging as a strong force, the boutique club is glitzier and better dressed than our older giants.
According to Barclays, the number of its customers operating a small health and fitness venture has surged by 37% in three years (January statistics). When it came to consumer spend, this too was reported as higher, with a 41% recorded growth between 2012 and 2015.
Zen Terrelonge for the Business Insider said, “It is particularly interesting that small offerings are winning money from customers at a time when the traditional large gym chain sector has never had more variety or competitive options.”1
As an example of incentive offerings from the larger chains, Pure Gym’s 2009 launch managed to secure 650,000 members and has enough capital to open 30 gyms a year. Furthermore, in May 2015, the firm struck a deal with gym giant LA Fitness to acquire 43 locations and now boasts 120 gyms.1 At David Lloyd, customers must enquire about membership costs, as they don’t appear on the website – therefore, they’re having those all important customer service conversations before members get cold feet. Fitness First is another giant that continues to appeal with its broad membership price bracket.
Business partners Giles Dean and James Balfour clearly turned up to their important meet with the architects. Edgy and luxurious fitness boutique 1Rebel is said to be flourishing. Balfour told Business Insider that he was “bored” with the “vanilla design” present in the larger gym chains. He only needed to turn to his father’s Fitness First empire for the model he was eager to steer away from. Team FitPro attended a session at the 1Rebel studios and, at £20 a session, it’s certainly a desirable weeknight option. So, how could these niche boutique offerings overtake the larger chains? Well, Balfour defends his project by saying that the boutique studios have a much more “attractive” price tag, alongside, say, an hour-long session with a personal trainer.
Balfour tells Business Insider, “Look at your typical Fitness First – we’re not challenging membership margins, we’re actually challenging personal trainers. A PT session costs around £60, but we’re providing the results of a PT within a fun group environment.”1
The 1Rebel army is set for big growth but states there is room for more businesses to follow suit and enter the boutique fitness marketplace. The question is, will it last? Or will this style begin to fade once consumers decide to spend their disposable income elsewhere? “The current fitness industry is built around relying on people signing contracts and not turning up,” argues Balfour. “If Fitness First is so proud of the product, then why don’t they tear up the contract to see who stays? The fact is, they won’t,” he said.
Let’s watch this space – the fitness business model is evolving but who will win out in the end? What do you choose? Chain vs boutique …
Don’t miss our session review of 1Rebel in Fitpro’s spring magazine – coming soon. Head on over to our social channels to share your views and opinions of the boutique marketplace.