It’s getting very interesting in the fitness market in London. Boutique, class-based businesses are growing and landing decent amounts of investment as they start trying to add more sites. It’s been a year since our cover story, where we explored why boutique fitness was getting so much interest.
But how far can this model stretch? Investors are asking whether this new-ish category of fitness can attract people outside of a very small affluent niche in expensive areas of London.
Many of London’s notable boutique fitness startups are opening sites in the coming months:
There is considerable appetite among investors in this sector. Growing consumer interest in classes and ‘efficient exercise’ (a 45 minute lunchtime-friendly class), and a polarisation in the fitness market between the low cost gyms like The Gym Group and Pure Gym at one end and the upmarket boutique players at the other are driving this. As a result, mid-market giants Fitness First and Virgin Active have been closing clubs and losing members.
Frame last week closed a £6m investment deal with VC Piper. 1Rebel also closed a £6.6m raise led by Codex Capital in recent weeks. Boom Cycle meanwhile closed a £2m deal in April.
For any of the players in boutique fitness, it costs between £1m and £3m to fit out a new site, before getting into running costs.
Class prices vary from around £9 (the cheapest class at Frame) to £28 at Core Collective.
Recruiting high quality spin, yoga and high intensity workout instructors is getting harder as more studios open. However, most of the fitness startups say they haven’t seen instructor costs go up as of yet, but they expect the best ones to become more coveted and command higher hourly rates.
It currently varies from around £35 per hour to £70 or even £100 to hire an instructor. They typically work as freelance contractors.
Many of the instructors come from performance and dance backgrounds as opposed to purely fitness. Some have large social media followings which also boosts take-up of classes.
There is an inherent challenge in finding suitable spaces for fitness. The studios need to be large, located in dense urban areas with affluent people, have a ‘D2’ licence to allow such a business and be soundproofed so loud music doesn’t disturb neighbours.
Property developers nevertheless are welcoming boutique fitness as a means to attract residents and office dwellers.
For example, luxury property developer Lodha has included 17,000 sq ft of dedicated fitness and spa space in its recent Holborn development, where apartments start at £950,000.
Developers on large projects are offering 12 month free rent periods to fitness businesses, further discounts and even contributions to the studio fit out in several cases.