The Impact of COVID-19 On Fitness Studios & Gyms

The coronavirus pandemic is prompting the closure of gyms and fitness clubs across the world as leading brands including SoulCycle, Equinox, Barry’s, Life Time Fitness, Orangetheory and more temporarily suspend operations.

In the US, in some cities and states including Florida and New York, gyms and studios have been forced to close as the temporary shutdowns of social spaces go into effect. In the UK, meanwhile, following the Government advice on Monday 16th March, which encouraged citizens to curb social interactions, boutique fitness brands began to email their customers to let them know they would be closing their doors until further notice.

In an email to its members, SoulCycle’s interim CEO Sunder Reddy revealed: “Never did we imagine a day we’d have to close the doors to 99 studios and countless riders who turn to SoulCycle for a safe space.”

Adding: “But what makes Soul so special is not our studios — it’s our people. And during this critical time, keeping our riders, instructors and studio teams safe is our absolute priority.”

Like many of its counterparts, the brand acknowledged that with the situation changing day-by-day it was uncertain as to when the drastic action would be overturned, but that it would be freezing all class expiration dates until at least April 30th.

Elsewhere, Equinox Chairman Harvey Spevak announced the closure of the brand’s gyms stating: “The COVID-19 health crisis is presenting challenges that are unprecedented in our lifetime … Be safe, remain healthy and we look forward to welcoming you back into our clubs as quickly as possible.”

While James Balfour, co-founder of London-based boutique studio 1Rebel, which will be closing its sites from Saturday, lamented: “While it breaks our hearts to have to close the clubs, we’re a firm believer in pulling together as one to face the challenge head-on, and we know as a member of the Rebel Army you are with us on this. We’ll be back and we can’t wait to see you in the studio when we reopen.”

This latest blow to the fitness industry comes just days after the very same brands had started to take action to help stop the spread of the virus by implementing new procedures such as running classes at 50% capacity and increasing cleaning times. The intention had been to remain open, however for most this is now increasingly unlikely.

What can we expect?
Understandably the uncertainty of the situation is casting a dark cloud over the market with business owners concerned over the knock-on effect of closures on their bottom line.

For some businesses, if the situation doesn’t improve over the coming weeks it may cause difficulties in bouncing back, as they struggle to make payments. Like many industries that have been suffering from disruption, the worry is that prolonged quarantine could also spark a tipping point in consumer behaviour, as people adapt and get used to new ways of engaging with fitness.

And investors are already betting on a change in engagement, with Peloton’s shares rising by 13% yesterday despite stocks plummeting across the board.

The at-home cycling brand, which streams connected classes on its bikes and treadmills, has been one of the key disruptors of the fitness market over recent years, with reports suggesting its sales had even surpassed those of SoulCycle’s recently.

And according to Needham analyst Laura Martin, in a note written to clients just two weeks ago: “With new COVID-19 hotspots in South Korea, Italy and Iran, we believe certain US consumers will be less comfortable over time going to their gym and more likely to order a PTON [Peloton] bike to stay home. This may drive higher unit sales and subscription revenue in 2020 than are currently in our estimates.”

With that in mind, the brand has already taken steps to leverage the current landscape by extending its free trial period from 30 days to 90 days in the US, UK and Canada.

For brands not currently offering at-home propositions, there are options, however. This morning, Barry’s UK streamed its first-ever Instagram Live workouts and no doubt others will take to YouTube, Vimeo, or other streaming platforms to offer at-home versions of their classes, in an attempt to cultivate ongoing engagement with their customers.

Mediation studio Re:Mind in London, which has also decided to close, emailed its members to let them know it would be utilising digital platform ZOOM to stay up and running, with founder Yulia Kovaleva commenting:

“To support our big family we will continue holding our classes live-streamed via ZOOM. Look out for an email with instructions coming to you shortly. You will be able to use your credits with us to book in for live sessions” ––the move demonstrating another option for boutiques and gyms to utilise during temporary closures.

With the situation continuing to evolve, over the coming days and weeks, we’ll be reporting on the impact of COVID-19 on the fitness and other wellness sectors, however, the response so far appears to revolve around staying agile, having honest and collaborative conversations with customers and where possible adapting offerings to cater to these new and uncertain circumstances.