CEO Corner: Andrew Alfano Has Big Plans for Retro Fitness
Under Alfano’s watch, Retro Fitness has undergone a massive rebrand and struck an agreement that will see a BlackRock fund open at least 80 gyms
The high-value, low-price (HVLP) gym space is highly crowded and competitive, but one brand, founded in New Jersey and now based in Florida, is looking to take over.
Andrew Alfano, who spent 16 years helping build Starbucks into one of the world’s most well-known brands, joined Retro Fitness as CEO in 2019 with similar ambitions.
Under Alfano’s watch, Retro Fitness embarked on a massive rebrand, largely moving away from its famous (or infamous) red-and-yellow color scheme in favor of a more minimalist, modern aesthetic. The brand also attracted the BlackRock Impact Opportunities Fund as a franchise owner, which signed on to open a minimum of 80 clubs in predominantly Black and Brown communities in New York, Florida and Texas through an initiative called Project Lift.
Between Project Lift and Retro’s traditional franchising efforts, Alfano believes the brand will, in time, have more than 1,000 gyms across the U.S. along with international locations.
Alfano spoke with Athletech News about how his time at Starbucks is informing the way he’s scaling Retro Fitness, the importance of creating community inside and outside the four walls of the gym, and the role Project Lift will play in Retro’s broader expansion plans.
The following conversation has been lightly edited for clarity and length.
Athletech News: Can you tell us about your background and why you decided to join Retro Fitness as CEO in 2019?
Andrew Alfano: I spent the majority of my career helping build Starbucks. I joined in the late 90s as a District Manager – it was so early in the maturity cycle of the brand that I actually had to explain to my wife what Starbucks was. At Starbucks, a high percentage of our locations were licensed, so while not franchising, it’s very similar. I exited in 2015 and joined an early education organization called The Learning Experience, which is where I cut my teeth the most as relates to traditional franchising. I spent about four years there.
After that, I was introduced to the majority ownership group of Retro, a family office. While I’ve been a gym-goer since I was in my teens, I really hadn’t been in the business of fitness. Quite honestly, my first inclination was, ‘Why do I want to get involved in such a crowded space?’ But in the high-value, low-price space where Retro Fitness plays, we’re the third largest. I joined the company in May 2019 to restructure and transform the brand. Since then, we’ve gone through a full transformation, brought in a brand new executive team and moved the organization’s headquarters from Colts Neck, New Jersey, down to West Palm Beach, Florida. Even with the pandemic, we achieved everything in our two-year strategic plan to transform the brand.
ATN: Why did you decide on a full-scale rebrand?
AA: When I was doing diligence on the fitness industry, I learned that almost everyone in this industry had been in the industry forever. That’s not a knock, but I was seeing a lot of the same people with a lot of the same offerings, using the same vendors and the same software. You have this giant sea of sameness.
Coming from a brand like Starbucks, I stood back and looked at it from the perspective of consumer engagement with a brand, which is very different from a (typical) gym. The average gym gets the average member three to five hours a week. But if you’re into a healthy lifestyle, that’s happening all the time. When you get outside the four walls of the club, we have what we call our brand halo. We’ve placed a very strong focus on healthy cooking – we have a partnership with Culinary Institute of America Alumni Chef Elizabeth Makos, and we’re in our fifth season of healthy cooking segments. We also have a strong focus on nutrition and mental health, along with underground music, something we call The Beat, where our members are able to download music before it’s accessible to the general public. This can’t simply be the old days of gyms where – I say this with a little levity – they were warehouses with gym equipment.
ATN: Inside the four walls of a Retro Fitness facility, what does the rebrand look like?
AA: It’s very progressive and modern. If you were to walk into one of our new clubs you wouldn’t think you were walking into a Retro Fitness. First of all, the colors have changed. Red and yellow will always be who we are, but they’re now accent colors versus the McDonald’s, in-your-face (old branding), although McDonald’s doesn’t even use red and yellow anymore. This isn’t an indictment on what the organization was, it’s about the maturing of a brand.
When redesigning the clubs, we started from the parking lot. I was talking to our designers about curb appeal, approachability and accessibility, similar to a general store. When old gyms were built, the first thing you did was walk up to the check-in counter, which is very uninviting, When you walk into our clubs, the very first thing you’re going to see is an open-air, inviting community area where you can sit and get some email done or drink a smoothie with friends.
Our amenities are also cutting-edge. Not only do we have everything that the boutiques offer with classes, we also have personal training, a smoothie bar and a retail pro shop. We have massage chairs and red light therapy because we understand that recovery is extremely important to members today.
It’s a very inviting, appealing approach to fitness to the point where our female membership is much higher today with our new branding than it was. Years ago, it was more of a 60-40 to 65-35 split (in favor of males). Our new clubs opening under our new branding, even in presale, are around 50-50.
ATN: Where are existing Retro Fitness locations at with the rebranding effort?
AA: Our legacy clubs (predominantly in the Northeast) are adopting elements of the refresh over the course of the next couple of years. Our Montclair location is the very first of the new brands in New Jersey. We also have one in Elwood (New York), on Long Island. All of our clubs that are opening in emerging markets are under the new branding.
ATN: Retro Fitness made headlines in 2022 with its Project Lift initiative. Can you tell us more about the program and how it’s progressing?
AA: We’re very, very proud of Project Lift. At its core, Project Lift is about giving back to Black and Brown communities. With those clubs, we’ve identified a mutually agreed upon organization in the community where a percentage of every dollar that we make as the franchisor, a percentage of our royalty, goes back to that organization for the entire life of the business.
We have four territories that are currently Project Lift initiative clubs: Queens/Long Island, Southeast Florida, Dallas-Fort Worth and Houston. Those are owned by BlackRock’s Impact Opportunities Fund. They have a minimum commitment to develop 80 clubs over the next five years, with aspirations of opening over 100 clubs during that time. In each one of those territories, they selected the local United Way as their giveback organization.
We’re looking for other investment groups, big or small, to take this journey with us. Our goal is to have 500 Project Lift initiative clubs. If we achieve that goal, Retro Fitness over the course of time will wind up donating tens of millions of dollars back to these communities.
ATN: What are your long-term expansion goals for Retro Fitness?
AA: I firmly believe this is a 1,000-club system domestically; there’s no question in my mind. I say domestically very intentionally because we have international aspirations as well. Today, the majority of our clubs are throughout the Northeast, but with our development deals that are in place, we have a nice penetration in Texas and Florida and overall have 200 clubs open or in development in our pipeline in nine different states. We were born in New Jersey, and that’s always going to be our hometown, but we’re talking to very large groups about big expansion plans across the U.S.
Correction: Retro Fitness’ partnership is with Culinary Institute of America Alumni Chef Elizabeth Makos not the Culinary Institute of America.