London boutique fitness industry – survival of the fittest

Prior to the pandemic, the London boutique fitness industry was one of the fastest growing fitness segments, according to the “2018 London Boutique Studio Report” compiled by independent leisure market analysts, LeisureDB. The report found that between 2013 and 2018, the number of boutique studios across London grew by 281%. This rapid growth was abruptly halted by the COVID-19 pandemic. In an open letter to Boris Johnson in December 2020, signed by the CEOs of London-based boutique operators – 1Rebel, Frame, Barry’s Bootcamp, Core Collective, Psycle, Tri yoga, Kobox, Barrecore, Boom Cycle and Ten Health & Fitness, the industry leaders warned that the boutique fitness industry was “on a knife-edge fighting for survival”. This article looks at the reshaping that has occurred since that time across the London boutique fitness studios.  

Indoor cycle studio, Digme Fitness, has been one of the more scrutinised players in the industry, likely due to MP Rishi Sunak’s wife, Akshata Murthy, owning a minority stake in the company. Digme made headlines with rumours of “collapse“, however co-founders Caoimhe and Geoff Bamber described the reports as “misleading press speculation“. All four London studios (Moorgate, Richmond, Bank and Covent Garden) are currently open and trading as normal after Digme underwent a restructuring in February 2022, following the Government’s rent moratorium ending on 25 March 2022. The rent moratorium banned commercial property landlords in the UK from taking legal action against tenants who had not paid their rent. However, despite this relief, the UK Government’s advice for people to work from home placed huge financial strain on many central London-boutique fitness studios to the point of collapse.

In 2020 Core Collective had two west London location (Kensington and St John’s Wood) and announced a partnership with Soho House Group to deliver exercise classes at Soho House’s White City club. Fast forward to 2022 and Core Collective has gone into administration with boutique fitness chain 1Rebel acquiring the two studios as part of a pre-pack administration deal. The Core Collective studios continue to operate under their current brand for the time being but 1Rebel announced that the brands will soon merge, with the Core Collective studios taking the 1Rebel name.

In addition to acquiring Core Collective, in June 2022 1Rebel opened the doors to its tenth club located in Covent Garden. The location is the site of the former HIIT (high intensity interval training) studio, Sweat IT. Sweat IT opened in 2018 and four years later in 2022 the company was placed into liquidation and purchased from liquidators by 1Rebel. 1Rebel now operates in ten different areas across the city (Oxford Circus, Hammersmith, Covent Garden, Holborn, Angel, Victoria, South Bank, Bayswater, Broadgate and St Mary Axe). Its ninth club in Hammersmith was part of its strategy to include sites away from central London in its portfolio and cater to a new demographic of homeworking customers. 1Rebel co-founder, James Balfour said “the post-lockdown journey has been challenging, but our focus on the experience and providing more choice has allowed our Rebels to return and make fitness a priority”.  

Indoor cycling studio, Boom Cycle adopted a similar strategy prior to the pandemic, operating central London studios in Waterloo, Monument and Holborn as well as local studios in Hammersmith and Battersea Power Station. In March 2021, Boom Cycle merged with ‘fight club meets nightclub’ boxing studio’ KOBOX to form United Fitness Brands (UFB). UFB has since added a further two brands to its portfolio, acquiring barre studio operator, Barrecore in April 2021 and London based yoga operator, Triyoga (advised by Mishcon de Reya) in December 2021. Each company in the UFB portfolio continues to operate under its own branding but are able to pool resources and knowledge to operate as a “supergroup” in the boutique fitness sector.

KOBOX founder Shane Collins has taken a different approach to combatting the new post COVID-19 world – think big but keeping costs small. In May this year he launched a new fitness franchise of “micro studios” named Circuit Society. Collins explains that “studios can be opened for a tenth of the price of traditional boutique studios (around £100k)” making it a “more accessible gateway to franchisees all over the world“. The first 3,000sq ft  location was opened by a franchisee in Camden in May and another two studios are set to open in St Albans and Bayswater later this year.

Although the London boutique fitness industry may take years to return to pre-pandemic growth levels, the opening of new studios and M&A activity across the sector is a positive sign of the sector’s resilience and innovation.

Article co-written by Imane Karoum, Paralegal, Corporate