ANALYSIS & COMMENT
Canarick believes bigger brands, such as Barry’s, will scale and dominate
Boutique fitness is here to stay, but I see there being fewer brands doing more business, and far fewer start-ups getting beyond two stores.
The boutique fitness future Finally, what of investor confidence in the boutique market? “Capital is certainly more scarce now,” confirms Canarick. “As with every business, investors require boutiques to provide more good, solid data points than previously. Aside from having the right product – reformer pilates being a current example – we want proof that the concept works and is expandable. We want to see at least 35% cash-on- cash return across multiple stores, and those stores must be spread across a minimum of three different geographies. “And then, be honest about the potential size of your company and where you want to go. If you’re envisaging hundreds or even thousands of sites, don’t only show me proof of concept from A-list cities such as New York, LA and London.
“Scalability doesn’t have to involve plans to get to thousands of sites, though: Barry’s has 84 globally. In fact, I’d always rather get to US$100m with 50 stores that are each doing US$2m, than 200 stores each doing US$500k. It allows you to focus on better geographies with less dispersion. It’s when boutiques over-extend themselves and move into less desirable areas that they start to get in trouble.” He concludes: “Looking to the future, boutique fitness – with its superior customer experience – is here to stay. However, I do see there being fewer brands doing more business, and far fewer start-ups getting beyond two stores. There will be some, of course, but increasingly I see the bigger brands – in the US, the likes of Barry’s, Club Pilates and Orangetheory Fitness – being the ones that scale.”
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LONDON BOUTIQUE STUDIO REPORT 2023
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