How the luxury fitness bubble popped as the pandemic wore on

Gym rats, take heed: The luxury fitness boom may very well be cooling down as high-end exercise brands like Peloton and SoulCycle struggle to make gains at this stage of the pandemic.

Peloton — the company behind a line of gadget-forward stationary bikes that enjoyed a swell of business during the early lockdown period — announced layoffs, studio closures and price hikes on its signature product in Canada and the U.S. this month, following a sharp decline in sales. 

Another high-end fitness brand is struggling, outside the home: SoulCycle, the chain of group cycling studios that launched in 2006, closed 25 per cent of its locations earlier this week. 

That includes a complete exit from the Canadian market with the shutdown of its lone Toronto studio, the company confirmed to CBC News.

"I think that explains the kind of popularity at the lower end of the consumer fitness market in terms of brick and mortar," said Natalia Petrzela, an associate professor at the New School in New York and author of Fit Nation: The Gains and Pains of America's Exercise Obsession.

"More people are going back to the gym in person, but it is the lower-end businesses that are thriving."

The fitness industry is between a rock and a hard place, with two previously reliable business models floundering at this stage of the pandemic. While in-person studios are still recovering from government shutdowns, at-home fitness brands are losing clientele while people favour affordable brick-and-mortar gyms and fitness centres. 

As pandemic-related measures relax, people are "re-evaluating their relationship to what they spend on exercise and why they want to work out," said Petrzela.

"What Peloton is experiencing is kind of a correction — not even a failure — but a correction on that over-the-top enthusiasm and excitement for home fitness at a moment when so many people had no other options," she said.

The company reported in May that its third quarter revenue fell short of expectations, taking in $964.3 million, a decline from the $1.26 billion it raked in a year earlier. Its market value plummeted by $46 million as pandemic-driven demand for at-home fitness dried up.

"But at the same time people aren't going back to work out in the same way that they did before," said Petrzela. "So something like SoulCycle, which was the darling of the boutique fitness industry, has to adjust as well."

Even as affordable gym chains thrive, small business owners are picking up the pieces two years later. One of the ongoing challenges is a shortage of qualified personal trainers, according to a Toronto-based business owner. 

"There are too many personal training companies, too many gyms that require trainers, but there are no trainers," said Sergio Pedemonte, the CEO of personal training company Your House Fitness. Pedemonte runs both an at-home service and a studio and gym.

He says that he's still struggling to find trainers after a mass exodus in 2020, when many in the industry left to pursue other ventures while CERB payments provided a financial safety net.