There’s a new kid on the fitness block. A new kid that is going to make working out personal, fun and boutique in style. Its name is Psycle, a new breed of cycling studios which is opening its doors in the heart of London’s West End this month.
After cutting a deal with a forward-thinking Crown Estate, the start-up has secured its first site at 76 Mortimer Street, W1. The circa 7,000 sq ft site will feature two studios, each with space for as many as 50 bikes, plush changing facilities and a swanky entrance and store at the front of the studio.
But why is a studio opening in February? A time when most of us have had enough of our well-meant-at-the-time fitness resolutions and have already let our gym memberships lapse. We’ve finished with our dry Januaries and are ready to have fun again.
Colin Waggett, former chief executive of Fitness First and co-founder of Psycle, says that’s exactly the point. Fun. For him Psycle will be unlike any other spin studio out there. In fact, he says, it’s not a spin studio. Psycle is about getting people who would ordinarily be put off by spin into a class to have a good time and almost forget they are working hard. Psycle, he says, is about a party on a bike.
Rouleur disco
Psycle is inspired by US phenomenon SoulCycle and if that brand is anything to go by, a party on a bike can mean big business.
SoulCycle was founded in New York in 2006 by Julie Rice and Elizabeth Cutler – a former talent agent and former real estate broker – who both used spinning classes to de-stress. The company has grown from one studio to more than 20 in the Big Apple and California and plans to have as many as 60 nationwide by 2015, plus a studio or two in London next year.
Its cycle studios play host to around 6,000 exercisers a day, with each paying $70 for a 45-minute session and as many as a dozen sessions take place a day. Classes sell out in minutes, making it a very profitable business, with sessions netting around $2,000. But why? It’s only spinning, right? Wrong.
SoulCycle has created a cult following. Classes are high energy, instructors have personality, and an affluent brand has been created with which people want to be associated. After scrimping and saving to promote their first club in 2006, Rice and Cutler sold SoulCycle to US fitness giant Equinox for an undisclosed, but inevitably large, sum in 2011.
With this in mind, it makes sense that Psycle should see a gap in the UK market for something similar.
With more than 10 years’ experience in the fitness sector and more in the leisure market, Waggett knew that on leaving Fitness First at the beginning of 2013, he wanted to do something special in the health club sector.
Boutique boom
Waggett sees the fitness market as very much like the hotels sector, with budget, mid-market, luxury and boutique offerings.
In fitness, the budget sector, similarly to hotels, is booming. Pure Gym and Gym Group (the equivalent of Travelodge and Premier Inn) are expanding rapidly. The Gym Group’s latest accounts show a turnover of £19.7m for the year ending March 2012, up from £12.6m a year earlier. Operating profits almost doubled during the same period to £7.2m.
The mid-market, like hotels, is being squeezed. Fitness First is rebranding and trying to reinvent itself as a functional gym following its company voluntary arrangement in 2012, while LA Fitness remains largely out of the headlines and Virgin Active is gearing up for a float.
Unlike hotels though, fitness has been largely lacking in a boutique sector. Until recently.
In the past few years single-category studios – those offering dedicated services such as indoor cycling, Pilates, Crossfit or purely personal trainer coached sessions – have been springing up. A boutique sector in fitness is emerging and Waggett is keen to be part of it.
“To be boutique not only does your product have to be good, the way you deliver it has got to be different and interesting too,” he says. “That doesn’t exist in any significant scale in the health club market.
“My personal view is that people who get the best value from exercise are people who stick with exercise, people that either take personal training or go to classes. They’ve got to the starting gate then.”
He adds: “The best thing about exercise is that it makes you feel better about life. It’s not just about weight loss. The thing about a high-energy class is that you come out on an absolute high.
Put those three elements together – ?the boutique element, the quality of the exercise element and making it as fun as possible with the high energy, dance party on a bike, and you hit the sweet spot.”
Leisure pleasure
Waggett believes experience is a fundamental part of leisure. Much like in retail, consumers want more than just a product these days. Shopping isn’t just about going to the shops, it’s about spending a day with friends, being entertained at the same time as consuming. For leisure to be “sticky”, it needs to offer the same experience.
“There is absolutely a role in life for commodity fitness, but there is also a role in life for the ‘this is me time’, the ‘my leisure time’, ‘my treat time’ and the ‘I want to do something where I feel like where I am and what I do identifies with me’ time,” says Waggett.
He says fitness consumers are also much more savvy today. They know what they like to do and when they like to do it, and they want it done well.
“Customers would rather go to a specialist that they can identify with than go somewhere where you can do everything, but never do,” says Waggett. “I think that’s why there’s an opportunity for more single category health clubs in the market.”
Alongside the specialist “dance party on a bike” that Psycle will provide, the business is also keen to make sure it has a strong retail offer. Each studio will feature a store at ground floor level, working as a shop window.
It has teamed up with aspirational fitness clothing brands Lorna Jane, Human Performance Engineering and Adidas by Stella McCartney; for beauty products it is working with British firm Ila Spa and US-based Mio, which makes products specifically for active women. For nutrition it will provide cold-pressed organic vegetable juices from Purearth and high-protein, freshly made snacks from Detox Kitchen.
Naked ambition
The boutique nature of Psycle means that its property requirements are different to its peers, says Waggett. Psycle, with the help of niche agencies Harper Dennis Hobbs and Shackleton, is seeking sites of between 3,500-6,000 sq ft with decent ceiling heights and a ground floor retail ?frontage.
The firm’s focus on providing something extraordinary for its customers means its space requirements are generally larger. It wants to provide bigger changing facilities for that luxury feel.
“Anywhere you stand naked has got to be pretty good,” quips Waggett.
Despite needing a shop window to promote its retail offering and the club, Waggett says Psycle can often help landlords fill the awkward spaces in their portfolios.
“As long as 30% of the space is ground floor then we can take basement, first floor and landlocked space,” he says.
With Mortimer Street opening this month, and second and third studios set to open in at Shaftesbury’s Seven Dials in Covent Garden, WC1, and in Canary Wharf, E14, within ?18 months, Psycle is feeling ambitious.
But Waggett is keen not to lose its boutique feel and go big too soon.
He expects to open between two and four studios a year, all within London and close to transport hubs, with decent office and/or residential offerings nearby to supply potential clientele.
Wagget says: “Ambitions for Psycle are to make sure that the sites we have are successful and to make sure that it is fun for our customers and fun to be part of.” Ride on.
Team Psycle
Psycle is co-founded by former Fitness First chief executive Colin Waggett and Tim Macready, chief executive and founder of executive search firm Skills Capital. It is backed by former Cinven partner Gordon Moore and Goldman Sachs partner Richard Butland.
