Boutique fitness studios are at the forefront of growth in the fitness club industry

A study by the International Health, Racquet & Sportsclub Association (IHRSA) shows that 54 million Americans, or 18.5% of the US population, were members of a health club in 2014. Of that number, 42 % are members of a studio, which includes a discipline-specific store or facility. (Some people are members of more than one institution.)

The studios may be small, but the money is big. In 2014, the U.S. health club industry reported sales of $ 24.2 billion, an increase of 7.4% from 2013, according to the IHRSA, and “a great deal part of the industry’s growth has come from small shops and studios specializing in sports ”.

Figures from the commercial group also show that Americans spent 13% more each month, $ 52 on average, on their dues in 2014 than in 2013. Studio members spent between $ 80 and $ 140, the most in mean.

The store operators see an opportunity. Last month SoulCycle, a stationary bike studio chain that sees itself more as a movement than just an exercise program, filed for an IPO.

See also: 6 Things to Know About SoulCycle Before Its IPO

Planet Fitness Inc. PLNT,
-1.76%,
which owns a chain of gyms and offers low membership prices, went public in August at $ 16 a share and has been volatile since. The stock was last traded at $ 17.58.

ClassPass, an online service that offers classes in various local studios for $ 99 per month, has expanded to 32 cities in the United States, Canada, and the United Kingdom since its founding in New York City in 2013. It was valued at over $ 200 million in January 2015 series B financing.

And IHRSA research shows that studios are growing in smaller cities that wouldn’t normally support larger fitness centers because shops have lower overheads.

There are a number of reasons for this change, according to Bruce Cohen, head of private equity and strategic practices at management consulting firm Kurt Salmon, who included a lengthy article on boutique studios in the last issue. of the biannual Kurt Salmon Review.

Among those reasons is a more knowledgeable consumer population about health and wellness, a focus on convenience, and a desire to connect with “instructors who feel like they’re deeply marinated in what is happening.” ‘they do “.

“More and more consumers are not just looking at the product but the connection,” Cohen said.

See also: 5 things to know about Fitbit before its IPO

While health and wellness is a multigenerational trend, Cohen said the biggest surge in studio classes was happening among millennials. Although they have been hit hard by the recession, these young consumers are paying more for the in-store experience.

“Millennials aren’t cheap, they’re frugal,” said Matt Powell, sports industry analyst at The NPD Group. “They are willing to spend the money if they find value.”

And a trip to the gym is more than just fitting in with a healthy lifestyle.

“When you’re in a classroom, you see the same people week after week. It’s becoming more of a social phenomenon, ”he said.

It’s a phenomenon that Jennifer Vaughan Maanavi, founder and CEO of Physique 57, a boutique fitness company that incorporates a ballet barre into her workout, put at the center of her experience.

“In a small studio, everyone from the instructor to the studio manager to the front desk staff can really build a relationship with the client and clients can build a relationship with each other and that is also what in my opinion keeps our customers coming back, ”Maanavi said. in an email. “I love it when customers say, ‘This is my happy place. “”

But at the end of the day, these facilities must provide more than just a sense of well-being.

“We continually like to modernize and respond to current trends to maintain customer engagement, but above all else, Physique 57 must deliver the desired physical results that we are known for and which form the foundation of our program,” said Maanavi. . “Our claim is that clients see results in as little as eight workouts, so everything we do must deliver on that promise.”