Xpoential Fitness, the global franchisor planned to go public last year but waited because of COVID-19. Does it expect the fitness club industry to rebound?
Xpoential Fitness LLC, the owner of a portfolio of niche fitness studios, is considering an initial public offering, insiders with knowledge of the decision reportedly told Bloomberg.
The company had been planning to become a publically traded company before the COVID-19 pandemic pushed the fitness studio industry into turmoil and its revival of these plans may be a sign that the fitness industry and its investors foresee a return to a (somewhat) normal status quo, amid a wave of vaccinations.
Xponential owns nine chains of studios — spread mostly through franchising — that cater to a specific form of exercise. Their offerings include Club Pilates, Pure Barre, YogaSix, CycleBar, StretchLab, Row House, AKT (a dance-based full-body workout), Stride (indoor running) and, most recently acquired, Rumble, “a boxing-inspired group fitness concept,” which it purchased last month.
As of the middle of last year, Xponential claimed to have 1,500 locations total, more than of them its Club Pilates brand, and it operates globally, with locations as far from its Irvin, California, headquarters as Japan, Saudi Arabia, Spain and Austria.
Its IPO valuation will probably be about $1.3 billion, its 2020 revenue was $435 million and its stocks prices increased by 60 percent in the last year, according to Bloomberg. Part of its survival plan last year was the marketing of digital apps offering classes in its exercise routines.
In 2020, profits from fitness facilities shrunk from $35 billion to $15 billion the previous year, leading to the closures of 17 percent of clubs in the U.S., with specialty studios faring slightly worse than general gyms, according to an industry group report. Similar shocks were felt around the world, as pandemic lockdowns closed studios for months, clients hesitated to come back, and internet-enabled home fitness solutions rose became increasingly popular.
Research into attitudes about returning to gyms and fitness studios have brought mixed news. A recent survey from RunRepeat found that more than a third of respondents did not intent to return to the gym. The survey also found that willingness to return was tied to vaccination: About 48 percent said they would return to the gym after they were vaccinated and another 24 said they would after their family and friends were vaccinated.
The success of the Xponential IPO may show investors’ confidence that people around the world will be returning to physical spaces to run or row or cycle in the near future.
Nick Keppler is a freelance journalist, writer and editor. He enjoys writing the difficult stories, the ones that make him pore over studies, talk about subjects that make people uncomfortable, and explain concepts that have taken years to develop. Nick has written extensively about psychology, healthcare, and public policy for national publications and for those locally- based in Pittsburgh. In addition to Athletech News, Nick has written for The Washington Post, The Daily Beast, Vice, Slate, Reuters, CityLab, Men’s Health, The Gizmodo Media Group, The Financial Times, Mental Floss, The Village Voice and AlterNet. His journalistic heroes include Jon Ronson, Jon Krakauer and Norah Vincent.