How Long Can Gyms Survive?

After a wave of bankruptcies and no end to the pandemic in sight, gyms are taking desperate measures to stay alive

Illustration: Alex Kiesling

When CNN anchor Chris Cuomo announced his positive coronavirus diagnosis in late March, Americans were rapt as the usually robust newsman, ashen and quarantining in his basement, struggled with the then-mysterious virus that had brought schools, businesses, and air travel to a standstill. As for me, I thought about the gym.

Just weeks earlier, I had seen Cuomo at a Long Island training facility, where we both packed into a class of more than 30 people who circulated, panting and sweating and bumping into each other, from shared kettlebells to rowers. That day, I remembered that my usual self-satisfaction from exercising was tempered by an unfamiliar twinge of uneasiness that — in light of the encroaching virus — maybe I was acting recklessly rather than virtuously by hitting the gym. Then, almost overnight, the very spaces that millions of Americans for decades diligently patronized in noble, mostly uncontroversial pursuit of health and fitness, morphed into hazard zones.

Seven months in, the situation looks dire for gyms. The leading industry association, the International Health, Racquet, and Sportsclub Association, estimates that Covid-19 will cause an industry contraction of $15.6 billion and that 25% of the nation’s 40,000 to 50,000 gyms will close their doors for good. It’s a sobering and sudden reversal of decades of uninterrupted, inevitable growth in brick-and-mortar fitness, valued at more than $30 billion earlier this year. Even as people increasingly shopped, dated, and worked online, fitness seemed like a final frontier of the IRL economy: It’s why big-box gyms were the last hope as anchor tenants for dying malls.

But in March 2020, Covid-19 changed everything. “It was like a thunderbolt,” says Rick Stollmeyer, founder and executive chairman of booking platform MindBody Online. “I remember it was Friday the 13th: 90% of our business activity went away all at once.” Gym and studio owners everywhere felt the pain. “Our revenue became obsolete overnight,” says Mimi Benz, founder and owner of SweatCycle, a Los Angeles-based heated indoor cycling studio with three locations. For Amanda Freeman, founder and owner of SLT: Strengthen, Lengthen, and Tone, a national boutique brand that began the year with 26 studios, the impact was just as immediate. Freeman shut down her studios on Tuesday, March 16, and “by Friday I was making layoff calls.” (She ultimately laid off more than 200 staff members, keeping only six to help with closures and communication.)

The sudden desolation of once-bustling gyms and studios intensified obstacles that undeniably already existed. Bankruptcies of mid-tier gym chains like 24 Hour Fitness and Gold’s Gym, long burdened by unsustainable debt, were early casualties, followed by Town Sports, owner of New York Sports Club, and the liquidation of Flywheel Sports. And now Equinox, the urban chain known for its luxury amenities, edgy advertising, and portfolio of brands from the boutique studio SoulCycle to the budget Blink Fitness, has $1.1 billion in debt, according to the Wall Street Journal, and is reportedly entering restructuring talks.

Such large clubs have historically failed to track how members actually use their facilities, a longstanding issue that now poses a challenge to luring back members. “You go to a big club and they know if you come or you don’t come,” says Emma Barry, a global fitness consultant, “but the club doesn’t know if you’re on the gym floor or in the sauna or doing something else, so they can’t personalize anything. Now you’re away six, seven months, and they have no way to know how to get you back, because they never really knew you.”

Facing dwindling membership rolls, gyms have scrambled to do whatever they can to keep people paying for memberships — including making it harder to quit.

The high price of real estate, especially in the affluent areas where fitness businesses are often concentrated, can become an insurmountable obstacle for gyms that are not generating revenue. “The current landscape puts all the power in the hands of the landlords,” says Benz of SweatCycle, citing her very different experiences with three separate landlords, only one of whom adjusted her rent based on her ability to generate revenue. Freeman of SLT had a similar experience; one landlord put her in default after only five days of nonpayment, while others gave her latitude for months. In this environment, undercapitalized group fitness studios, dependent on packing classes into close quarters, are finding already razor-thin margins unsustainable.

Facing dwindling membership rolls, gyms have scrambled to do whatever they can to keep people paying for memberships — including making it harder to quit. Many quickly pivoted to digital: Within a couple weeks, many boutique studios were offering paid, professionally produced virtual classes. Dan Trink, co-owner of The Fort, a New York City–based strength-training gym, immediately started offering virtual coaching and nutritional counseling for clients unmoored from their daily routines — and their facility’s weight racks. Soon, The Fort began selling its programs as a standalone product and, for the first time, targeting a national clientele with social media advertising. “We were a word-of-mouth business before,” Trink says, “and that’s very hard to do when you don’t have people in front of you anymore or a business for them to come into.”

But the move to digital workouts came easier to some than others, and many fitness providers and their clients alike see the offerings as only a brief, stopgap solution. About 40% of The Fort’s clientele signed up for virtual coaching, Trink said, but within a few weeks, commitment flagged. “I think people thought the length of the quarantine was going to be more limited,” he says. “People got kind of tired doing burpees and air squats in their homes.” Competing with established digital fitness providers was also challenging. Benz began offering virtual cycling classes but quickly realized that it wasn’t worth the labor, as Peloton — arguably the fitness industry’s biggest pandemic winner — with its high production values and sophisticated analytics, had already cornered the market. The Megaformer, a massive piece of training equipment that costs more than $10,000, is the cornerstone of SLT’s intimate studio classes, and Freeman found it difficult to approximate this unique experience online.

Some fitness companies are now taking a page from Peloton and selling actual equipment. Barry’s Bootcamp, an L.A.-based fitness chain with more than 70 locations in 14 countries, launched a range of online workouts, some requiring equipment, which it now sells, stamped with a logo, online. And even SoulCycle, known for its clubbish, grapefruit-scented studios, rushed the release of its own $2,500 home bike, which is compatible with the Variis, the online workout platform of its parent brand, Equinox.

Over the summer, many gyms found a lifeline in outdoor classes. “I never thought I’d be conducting class in a parking lot,” says Benz, who was nevertheless grateful for the fresh air that allowed riders to recapture a sense of community while feeling relatively safe from virus transmission. Southern California’s temperate climates make outdoor workouts a long-term possibility, but East Coast brands like SLT and DanceBody, a choreographed program that has launched “Socially DisDanced” classes, are colonizing parking lots and parks as long as weather permits. Outdoor group classes at Barry’s Bootcamp are so oversubscribed that employees can’t even get a spot, says Victor Self, a vice president at the company.

Fitness companies have also made adjustments to indoor exercise, both to comply with health regulations and to reassure skittish consumers. Formerly open-floor gyms are now operating at limited capacity and requiring advance bookings. Some gyms and studios are piloting “hybridized” experiences that reduce staffing costs and crowding. A member might, for example, check in through an unmanned digital terminal and then be guided through a workout by a recorded trainer on a screen, similar to the Mirror. At Barry’s Bootcamp, clients can sign up for “audio open gym,” during which they are physically present at the studio but follow a recorded workout on headphones. Others like The Fort are offering “bespoke” sessions where one client and trainer occupy the whole gym.

“I’ve spent the last couple of months reaching out to and connecting with other small fitness studio owners, and there is one through line: We are all fighters.”

But with a third wave of Covid-19 infections rising, will these programmatic adjustments — along with temperature checks, plexiglass-encased treadmills, and ubiquitous hand sanitizer stations — be enough to bring people back to brick-and-mortar fitness? Trink of The Fort imagined that bespoke sessions would assuage clients’ fears, especially those who could afford the price hike, but was surprised at how many said, “I’m sorry, I’m just not ready to work out indoors right now.” Freeman is considering a scenario in which those who have established new routines might no longer think it worthwhile to commute 20 minutes each way for a 50-minute class and imagines offering longer, more intense workouts that might be a once-or-twice-a-week destination as opposed to a daily routine.

As for those already returning to indoor workouts, “it’s the diehards,” says Barry, people like me who lined up at my local gym at 5:45 a.m. the day it reopened. Those who “would be nervous,” says Trink, “asking, ‘Did you wipe down the bars?’ are not even coming in at all. The ones who are coming back are confident in their decision.” According to Freeman, some hardcore members are even driving across state lines from Westchester County, New York, to Greenwich, Connecticut, to avoid having to wear a mask while working out.

Ultimately, policy more than marketing might determine which brick-and-mortar establishments survive. States that have enacted more stringent public health measures are the most difficult environments for fitness businesses. “The states that stayed open the longest and shut down the least amount of time are doing the best,” says Mike Hibner, who has more than three decades of industry experience and currently works as director of key accounts for equipment supplier Core Health and Fitness. While IHRSA has lobbied Congress for a $30 billion relief bill, co-sponsored by Republican and Democratic legislators, many gym owners are also fighting back against regulations. Freeman has taken an active role in protesting a New York City measure that allowed gyms to open, while providing no timeline for boutique studios. In Los Angeles, Benz has launched a petition to provide greater rent relief for small business owners, especially those in health and fitness, that remain shuttered by law.

This struggle for survival has forged some unexpected alliances. Freeman has teamed up with a Long Island gym owner and CrossFitter Charles Cassara, who is filing a class action suit against Governor Andrew Cuomo for delaying gym reopening. She has also found solidarity with brands like Solidcore and BodyRok, usually her direct competitors. “We’re talking all the time, trying to figure out what to do and how to proceed. You just want to be aligned.” Benz, too, has been teaming up with her competitors: “I’ve spent the last couple of months reaching out to and connecting with other small fitness studio owners, and there is one through line: We are all fighters.”

If they can just hang on, many in the fitness industry, including Stollmeyer of MindBody Online, are confident that the sector will enjoy a “renaissance,” paradoxically due to the pandemic that has brought the industry to its knees. Between all the stress baking and sheltering at home, many Americans have put on the Quarantine 15. Others miss both the community — or the alone time — they once found at the gym, as much as the calorie burn. This pent-up demand, and an increased awareness of the importance of preventative health, could help the industry rebound stronger than ever, especially if a vaccine helps calm fear of transmission. “No one can deny Covid’s been much worse for those in poor shape, that they have suffered far worse,” Stollmeyer says. “We’re going to come out of this with a global imperative to embrace the preventive value of fitness and wellness.”

Historian @thenewschool. Author of CLASSROOM WARS; working on FIT NATION. Host @pastpresentpod. Twitter/IG @nataliapetrzela.

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