Published: August 8, 2019
Last week, as Equinox Group announced its foray into connected fitness, patrons of the company’s high-end health clubs and SoulCycle studios lined up to cancel their memberships. Why? Let’s just say Equinox had a week. Here’s what went down.
The Good: Equinox unveiled its Peloton competitor. Launching later this year, Equinox will offer connected equipment and streaming content for the at-home market that encompasses its portfolio of fitness brands, including Equinox, SoulCycle, and Precision Run.
- The SoulCycle stationary bike, identical to those found in its studios, is getting a screen and will be available for purchase. (FWIW: Both the SoulCycle and Peloton bikes were designed by Eric Villency.)
- Proprietary Woodway treadmills, also equipped with a screen, will bring the Precision Run studio experience into the home.
- A yet-to-be-named digital platform and app will feature live and recorded classes led by top instructors from Equinox’s portfolio of fitness concepts.
- Prices were not announced, but across the connected fitness landscape, costs range from $1,000 to $4,000 — plus a $40–$50 monthly subscription fee for content.
As we’ve detailed in our ever-evolving Peloton of ‘X’ list, connected equipment and streaming content are redefining the fitness industry.
To date, Peloton has benefited from first-mover advantage, raising $995M, earning a $4B valuation, and testing the IPO waters. While a growing list of upstarts has been fast to follow their lead, Peloton is the undisputed frontrunner. But, in entering the at-home space, Equinox isn’t trying to beat Peloton at their own game. Equinox is playing a different game altogether.
For perspective, Peloton has sold more than 400,000 bikes and counts more than 1M subscribers among its userbase. Some reports put their 2018 revenue north of $700M.
Equinox is a luxury fitness company backed by The Related Companies (more on that later), whose portfolio of brands includes Equinox, PURE Yoga, Blink Fitness, and SoulCycle. Across all its brands, Equinox counts more than 200 locations that generated $1.3B in 2017 revenue.
Although Peloton has assembled a strong talent pool, pointing to its instructors as a key differentiator, Equinox and SoulCycle created an in-house talent agency to represent their instructors and trainers. Additionally, NYC-based PROJECT by Equinox serves as a class and talent incubator for the brand.
While Peloton’s “Hotel Finder” is smart, and there’s an opportunity to sell their equipment commercially, Equinox has pushed much further into hospitality, opening the first-of-its-kind hotel in New York. With additional hotels planned for Los Angeles, Santa Clara, California, Seattle, Chicago, and Houston, plus 90 health clubs, Equinox will have plenty of opportunities to feature its own equipment.
The Equinox of ‘X’. While countless connected fitness companies have piggybacked on Peloton, Equinox may have leapfrogged the entire category.
“It’s really the intersection of digital and physical that makes this a very different concept to begin with.” – Jason LaRose, CEO of Equinox Media
As we’ve discussed, the near-term future of fitness will be defined by access—the option to work out at home, go to the gym, or tune into an audio class—and won’t be confined to an either-or decision between digital or in-person exercise.
If that’s to be believed, the Equinox of ‘X’ represents an omnichannel approach to exercise that offers components of real-life workouts and community: access the SoulCycle or Precision Run experience in a studio, in your living room, or in an Equinox hotel or health club.
With Equinox’s entrance into the space, what set the Peloton of ‘X’ category apart—“at-home”—might now result in them being left behind.
The Bad: Equinox’s announcement couldn’t have come at a worse time. Just as we got word of the bike/treadmill launch, news broke that real estate billionaire Stephen Ross would be hosting a ritzy fundraiser for President Trump at his home in the Hamptons.
Who’s Stephen Ross and why does it matter? In addition to being America’s 55th richest person, worth an estimated $9.9B, Ross is the owner and chairman of The Related Companies — the real estate investment firm that owns Equinox and SoulCycle.
The Fall Out: Concerned that their dues are indirectly benefiting Trump, people are canceling their Equinox memberships and boycotting SoulCycle.
- Equinox and SoulCycle responded with statements that declared Ross a “passive investor” not involved in the management decisions of the respective companies.
- The statement, and Ross’s refusal to cancel the event, did not satisfy customers, many of whom reside in liberal cities.
- Both brands are closely linked with its patrons’ identity and sense of community. SoulCycle, for one, sells itself on “diversity, inclusion, and equality”, as well as statements like, “All souls are welcome.”
- Ross’s support of Trump seems to fly in the face of those sentiments, causing celebrities like Chrissy Teigen, Jonathan Van Ness, and Billy Eicher to publicly cancel their memberships.
- Meanwhile, fitness competitors including NYSC, Tracey Anderson, and Flywheel seized on the backlash, offering discounts and free classes in an attempt to convert fleeing members.
Zooming out: All Americans are entitled to their own opinions and political views. And there are wealthy donors on both sides of the political divide. But given the current climate, those donations are likely to be under much closer scrutiny than ever before.
Just how disastrous this boycott will be to Ross’s (or Equinox’s or SoulCycle’s) bottom line is yet to be seen. Nonetheless, all parties involved have their work cut out for them as they attempt to re-earn the trust of what was once a fiercely loyal customer base.