Craig Eisele on …..

March 4, 2012

UPSCALE GYMS Find Financial Gains by Adding retail and Other Services

Filed under: Uncategorized — Mr. Craig @ 9:02 am

When Erin Wright arrived for dinner at Philadelphia’s hip El Vez Mexican restaurant one night recently, her two friends—along with the table’s waitress—immediately demanded that she tell them where she’d bought her short black dress with its eye-catching, asymmetrical hem and sexy back cutout.

Her answer surprised them: “The gym.”

You’ve heard of boutique fitness clubs—such as the popular Manhattan-based group-cycling chains SoulCycle and Flywheel—but the luxury workout places are increasingly ramping up their emphasis on “boutique.” They have ventured beyond wick-away T-shirts and water bottles and plunged headlong into the fashion business, offering clothing, jewelry, and accessories, much of it not even designed for workouts. Busy urban professionals—who flock to exclusive designs that are easily grabbed en route to the gym—are driving the trend.

Wright, a 34-year-old Web news producer, frequents Lithe Method, a boutique fitness brand whose trademark “cardio-cheer-sculpting” (yes, that’s “cheer,” as in “cheerleading”) inspires long waitlists at its four studios. “I’m at Lithe four to five times a week, and I can grab this and not look sloppy when I leave,” she says of her dress, a sold-out $125 spandex-and-mesh Hotstepper, part of a 14-piece “Lithe Wear” line that also includes $95 faux-leather leggings with lace patches.

Lithe founder Lauren Boggi Goldenberg says her six-year-old company’s foray into nonfitness clothing is a natural step. “My company’s vision is for people to be fit, hip, and healthy,” says Goldenberg, a former University of Southern California cheerleader who based the dress on an old uniform of hers. “Did I ever think I would end up in the fashion business? No. But Lithe has become a lifestyle, and my clients want to be dressed for it.”

At just 10 months old, Lithe Wear already accounts for 10 percent of the company’s revenue, according to Goldenberg. The International Health, Racquet & Sportsclub Association has also recognized the rising trend: “Non-dues sources of revenue [are] something that just about all clubs are trying to grow,” notes Meredith Poppler, the group’s vice president for industry growth.

New York’s Bari Method, which specializes in an exercise that is equal parts dance class and boot camp, offers leather bracelets with engraved silver plates featuring the studio’s “word of the month” (such as “love” or “discipline”), and a $75 limited-edition tote bag designed by its seasonal artist in residence, whose work adorns the Tribeca studio. (An artist in residence at a gym? “Art is something we’re interested in,” explains director Sarah Michelina. “Our goal is to be a place you want to come and hang out. That’s why we have a sofa.”)

SoulCycle, the eight-studio cycling chain that’s a celebrity favorite, sells $88 leggings that have been worn by such celebrities as Karolina Kurkova, a $42 grapefruit-scented candle (a collaboration with designer Jonathan Adler), and a $225 Swarovski crystal-encrusted iPhone case emblazoned with the Swarovski logo. Every month, SoulCycle offers a new collection of items and says it has expanded 119 percent each year since 2008 and now accounts for 10 percent of total chain revenue—not bad for an effort that previously relied on guerrilla marketing.

“We couldn’t afford even a half-page ad in Hamptonsmagazine, so we thought, ‘If we could just get 100 people to walk around wearing a wheel [SoulCycle’s logo], it probably would be worth a lot more,” remembers co-founder Julie Rice. The first $26 yellow camouflage T-shirt (“It sounds a little tacky, but it wasn’t,” Rice says) was so beloved, clients turned up years later for a farewell party at the original studio wearing it. According to Rice, SoulCycle’s online shop receives orders from around the country, from places hundreds of miles from the nearest studio.

Like Goldenberg, Rice says the retail operation expanded organically. “You get a deeper understanding of how people feel about this workout from the clothes they’re helping us choose—powerful, strong, sexy,” she says. Bari’s Michelina adds, “Our goal is something bigger. It’s not just a workout. We want to give people something to carry around with them that reminds them they’re part of a movement.”

It may sound lofty, but it’s smart strategy. “Crafting a brand is really important for longevity in fitness, because you can’t protect your [intellectual property] to any real degree,” says Brynn Jinnett, 28, a Harvard-educated ballerina who founded New York City’s The Refine Method in 2010. Jinnett, who plans to introduce her own line, has watched closely as New York boutique chains find success in retail. “Creating a full lifestyle line contributes to the equity of their brand,” she says.

Last year, Equinox Health Clubs introduced a private label featuring what Wendy Low, the company’s senior director of retail, calls “fashionable basics.” These include a $168 double zip, cowl-neck black jacket, which quickly sold out. The company last year participated in Fashion’s Night Out, the late-night shopping extravaganza created by Vogueeditor Anna Wintour. Some recent offerings: multistrand bracelets and an ultrasoft Hudson jean, an exclusive collaboration with the denim company. Equinox declined to release figures, but Low said the private label items “were one of our highest-performing vendors.”

Equinox’s filter for its private label offerings is “to and from” the gym. Low acknowledges the lines are so blurred these days, that leaves a lot of leeway. “Our customers want more than performance pieces. They want fashion that’s convenient, that they can leave the gym in and go to lunch or dinner and still look great. That’s where the demand is.”

Boutique gyms like to claim, as fitness impresario David Barton has, that people spend more time there than in their own living rooms. Many plush gyms already offer cult bath products (some members confess to taking more showers there than in their own bathrooms), in addition to health food, Wi-Fi, and now clothing. What’s next—home décor? Well, SoulCycle is introducing its own cheery yellow spin bike for home use. Time will tell if it doubles as a clothing rack.


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