CHAIR FOREWORD
LEISURE DB
NEW OPPORTUNITIES
A surveyor by training, most people will know me as a big box health club founder: I opened my first club in 1979 and went on to co-found LA Fitness, later becoming chair of Esporta and a non-exec director of Holmes Place International. After the sale of LA Fitness in 2005, I co-founded Addleisure plc, where our portfolio included Movers & Shapers: a joint venture with BUPA that brought small boutique fitness to the high street. We later also invested in Mosaic, which curated a number of group exercise brands under one roof, and CIRQ, a screen-led HIIT
boutique in Fleet Street that performed well until COVID hit. Here is what I am seeing in the London boutique sector now.
The boutique phenomenon is based on an unbundling of the traditional health club, the assumption being that with the right expertise, each individual component – HIIT or group cycling, boxing, yoga or pilates, etc – can stand on its own as a branded specialist product and attract a premium. As a consequence – and in contrast to the big boxes that offer a bit of everything – the boutique sector is very vulnerable to fashion. Reformer pilates might currently be highly fashionable, for example, but a boutique specialising in only one discipline risks falling out of favour if the fashion changes. This has led to multi-discipline locations and/or groups of brands collaborating in one location, ironically beginning to reconstruct the multi-disciplinary big box clubs they had previously deconstructed, but now with a different pricing model. The pandemic has fundamentally changed the occupancy of the city. People are not in the office as much, and when they are, it is a place of work, with less time for social or life beyond the office. A few boutiques have rebuilt their businesses, especially those branded and fashionable products, but boutiques that rely on volume in the City are struggling. The shift of boutiques towards affluent residential areas where the population is more stable – for example, Kensington and Notting Hill, St John’s Wood, Putney and Wimbledon – will therefore continue. Funding is complicated at the moment, and for small and mid-sized businesses that borrowed to weather the pandemic storm, the increased lending on their balance sheets makes it hard to get additional funding. This is not a permanent factor, but it will take time for the canvas to change. Money will always be there for the right projects – ambitious, new, on-trend ideas – albeit not necessarily from traditional funders. Provided boutique brands can retain their passion and reputation for being the best at what they do, there will always be a market for them. In fact, for new brands coming in, the timing could not be better, as the high street is experiencing a seismic shift in occupant profile and occupancy and property is more readily available. Rents are also more favourable than in the unsustainably overheated pre-pandemic market, while planning is increasingly flexible around use of space. Property recessions have always been good for our industry and there are real opportunities for those brave enough to dive into the market.
Property recessions have always been good for our industry. There are real opportunities for those brave enough to dive in.
DAVID TURNER Chair, Leisure DB
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LONDON BOUTIQUE STUDIO REPORT 2023
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