585 - Are You Ready For The Strength Training Gold Rush? (with Luke Carlson)

Now, the sixth big takeaway from this report is

really what you said.

The industry is bifurcating.

The middle is under significant pressure.

So at one end, you have what we've always called HVLPs.

So this is high volume, low price.

Sometimes people call it high value, low price.

Think Planet Fitness, you know, worldwide, it could be Basic Fit, Smart Fit.

In the U.S., it's Crunch.

Pure Gym is primarily Europe, I think.

Back in the U.S., we have a concept called EOS.

So those are the classic HVLPs, and they are doing really, really well.

And then on the other end of the spectrum, this is kind of the premium category, we have like the Lifetime Fitnesses of the world.

Lifetime Fitness, and I mention this because their headquarters is a 21 minute drive i think from me right now i'm sitting in our corporate office uh they'll do three billion dollars or they did three billion dollars last year um with i think you know 1.5 1.6 million members and their membership is growing but they continue to increase their prices so they're in that category of driving profitability so that premiums uh sector is doing really well, but the specialized boutique sector is doing pretty well as well.

Okay.

So now they're doing well due to differentiation, but they're not all doing equally well.

So Club Pilates, you know, Hot Works, Orange Theory, F45, some of them are really struggling and some of them are doing well.

But the concept there is if you have a differentiated product, which studio generally does, you're probably doing pretty well.

Um, so maybe a take home message there is the general purpose health club that was kind of 50 to a hundred dollars per month is absolutely getting squeezed from both directions, right? They're getting squeezed and well, I can join a $20 gym or I could go to a, you know, pretty fancy boutique or studio or, or upscale health club, like lifetime fitness for just a little bit more.

So we probably don't want to be caught in the middle.

And I think the way the consumer is thinking about this or the way we have to build for this is we have to give either incredible value, meaning low price, give a lot of value for the low price, or the customer saying, give me something different.

And I hate the word better, but maybe better, right? Give me something different or better, or you better be incredibly low priced.

And I'm around, and I know our listener is, doesn't fall into this category, but I'm in, you know, I'm involved with so many people that just operate in mediocre health clubs that are just like every health club on earth.

And if Lifetime Fitness comes to town, they're going to be crushed.

Their biggest nightmare is what if they build Lifetime Fitness in my town where every high intensity training operator listening to this right now, if Lifetime Fitness comes to town, you are not going to be hurt, right? You'll probably grow because...