Flywheel Sports is closing 12 of its 42 studios, including locations in Atlanta, Austin, Los Angeles, Miami, and the San Francisco Bay area.
In an email to members on Wednesday, August 14, Flywheel said the final day for the Playa Vista, Larchmont, and West Hollywood studios will be August 29th.
In addition to informing members of the closures and discussing refunds, fees, and credits, Flywheel included an “exclusive opportunity” for LA-area members to purchase the Flywheel Home Bike.
How We Got Here
In recent years, Flywheel has found itself in a tough spot: between SoulCycle and Peloton. The former built a cult-like following by focusing on their brand and the in-studio experience. The latter credits convenience, content, and a better bike for their success.
Flywheel’s initial response was to do both, open new studios and launch a Peloton-like bike and streaming service. Now, it looks like the company spread itself too thin.
Backing in December of 2018, the Financial Times reported that Flywheel hired advisers to explore a sale of all or part of the company, but that strategy, too, was short-lived — Flywheel pulled the plug on that plan after failing to garner interest from potential suitors.
Under New Management
In May of this year, Kennedy Lewis Investment Management, a lender to Flywheel, seized control of the boutique studio operator and will explore sale options.
Kennedy Lewis, which owns roughly 75% of the company, had previously provided a loan to Flywheel before providing another $15M in exchange for majority equity control. This news comes after reports that Flywheel failed to bring on investment in December 2018 and soon after, being unable to find a buyer while exploring a sale in the range of $350M.
Now, a representative from Kennedy Lewis said they’re “excited” to explore growth opportunities for Flywheel’s at-home bike, which sells for $1,699 before tax and delivery, plus a $39/month subscription. In the time since the takeover, there’s been a push to make the at-home bike more widely available at Best Buy locations and online via Amazon.
However, given Flywheel’s stalled grown, and the momentum behind other competitors in the Peloton of ‘X’ category, it could be too late to mount a comeback.
A Sign of What’s to Come?
This news points to a broader shift among boutique fitness studios, especially those in the cycling category. The battle shaping up among indoor cycling studios, from locally-owned to franchised to high-end, is being magnified by at-home options, connected equipment, and on-demand workouts.
While high-end options like SoulCycle and Flywheel raised the bar on studio cycling, they also backed themselves into a corner — they’re largely relegated to the coasts and intentionally geared toward an elite crowd. Meanwhile, CycleBar has taken a decidedly different approach, expanding to 200 locations by targeting untapped and overlooked markets from Fresno, CA to Fargo, ND to Providence, RI.
While some are inclined to call it a bubble, the current state of indoor cycling seems closer to recalibration as brands are forced to figure out how to engage current riders, reach new ones, and provide more value in order to differentiate themselves in an increasingly crowded cycling (and fitness) landscape.