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Analyst Warns That the Spinning Exercise Craze May Be Near Its PeakBy
Jefferies says Cyc Fitness price cut points to oversaturation
Planet Fitness could benefit as consumers seek more variety
New York City’s stack of spinning classes -- a favorite fitness regimen of the slim and sophisticated -- appears a little bloated.
Cyc Fitness, an indoor cycling outfit with four Manhattan locations and a loyal following, recently cut its single-class price to $22 from $28, according to a note from Jefferies LLC consumer analyst Randal Konik. While that’s good news for the city’s deal-seekers, Konik says it reflects the “burgeoning supply of spin concepts in major metropolitan markets” as consumers seek variety in their workouts. For context, SoulCycle has 18 Manhattan studios plus three in Brooklyn, and Flywheel has nine locations in the city and one in Brooklyn.
For those wondering what this means for Wall Street’s growing affinity for hosting clients at workout classes, Konik notes private equity has also shown interest in climbing gyms, boxing studios, indoor rowing arenas, and recovery and movement centers. TPG Capital created a company last year called Xponential Fitness to encompass its growth-investment arm’s acquisitions of StretchLab, Club Pilates and CycleBar.
“Surprisingly, sponsors don’t appear hesitant to get tied up with smaller, less-developed concepts,” Konik said.
These trends may lend support to Planet Fitness Inc., which offers amenities such as hydromassages and Total Body Enhancement at some locations, plus multiple disciplines in cardio and strength, Konik said. Shares of the “judgement-free” gym chain recently touched a record high after better-than-expected fourth-quarter results and guidance that Guggenheim Securities LLC analyst John Heinbockel called “conservative.”
Meanwhile, SoulCycle’s plans for a public offering have been on hold since it filed in July 2015, as the company has focused on growing its footprint in core markets. In the meantime, SoulCycle has branched out with retail collaborations for its branded clothing and SoulAnnex, which offers an array of non-spinning classes at its studio in the Flatiron District.