ANALYSIS & COMMENT
This financial story isn’t just about the fall of the per- class price tag, which is a natural evolution in business as a product becomes more mainstream and prices drop over time. (In this case driven in part by aggregators such as ClassPass and GymPass, which offer affordable variety, and aggregated offerings such as house-of-brands Xponential, which is able to use its size for efficiencies across its 10 boutique brands.) It is also about the uncertainty of our world right now, which brings insecurity to all industries. And it’s about post-pandemic consumer behaviours that directly impact the boutique fitness model.
Boutique fitness now feels like a tough sector. My unbridled pre-pandemic optimism has been tempered to a more balanced view.
The economics of the model have changed. While some markets are in growth mode, others have become Tuesday–Thursday businesses in our hybrid working world, and boutiques’ original pay-as-you-go approach is evolving towards a more sustainable membership model. (Meanwhile big box clubs are becoming more flexible, with short-term memberships, punch packs, casual visits and day passes). As the HVLP (high value, low price) and some mid- and luxury-level segments flourish, fitness boutiques will also come down to unit economics – site-by-site profitability – and consolidation will continue as operational budgets remain tight. Boutiques will also continue to explore partnerships, ancillary income and creative ways to save money – sharing real estate across dayparts with other businesses such as food and retail, for example. #2 Staff shortages Another significant statistic from BFS indicates that the number one pain point for boutiques is finding great people, with 75 per cent of surveyed studios calling out hiring as one of their top three challenges.
Barry’s has evolved while staying true to its brand and its concept
Boutiques have always prioritised the quality of their talent, but the pain of finding and training new staff in high-churn roles is now very real, with a smaller, younger, less experienced labour pool. Potential recruits also now have different needs and desires. The solution is to adapt to shifting expectations to become the place where they want to work. That might mean salary rises, regular job title changes to acknowledge career progression, more and different perks (often generationally different), or employment models built around an expectation of six-month tenures in today’s gig economy.
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LONDON BOUTIQUE STUDIO REPORT 2023
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