ANALYSIS & COMMENT
Club Pilates is helping drive strong performance at Xponential Fitness
MARKET TRENDS
Jon Canarick, managing partner of US-based investment firm North Castle Partners – which counts Barry’s among its portfolio – talks boutique market trends, investor confidence, and franchising pros and cons
“Uncertainty is not good for any business,” says Jon Canarick, managing partner of North Castle Partners. “If you look at the boutique market through the lens of recovery, it’s done reasonably well in the 18 months since pandemic disruption and uncertainty finally eased. Unfortunately, however, we’re still using the word ‘recovery’. “Viewed through the lens of pre-COVID performance, many brands and stores within the boutique sector aren’t doing as well as they were before COVID. Based on my sources and aggregated data points – excluding reformer pilates, which is booming – I believe the sector to be around 10-15 per cent down on attendance and revenues compared to pre-COVID. “Barry’s recovery is very strong compared to the rest of the industry, with aggregated same-store attendance approaching pre-COVID volumes. Even here, however,
hybrid working is having an impact on stores in business districts; fortunately for Barry’s, only a handful of its studios fall into this category. “Yet in cities across the world – and across the boutique sector – capacity is no longer where it needs to be, and it isn’t as though other stores can make up for that. Classes can’t be filled beyond the spaces available. Longer waitlists don’t help anyone. “Additionally, when people work from home, they tend to stay at home. Home fitness may be a bad business now in terms of new equipment sales, but it still commands an enormous market share in terms of workouts.” Continuing on the theme of reformer pilates, Canarick adds: “Reformer pilates is now the rising tide: we first invested in this segment in 2016 and I’m bullish in my belief that this trend will continue for years to come.
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LONDON BOUTIQUE STUDIO REPORT 2023
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