When you think of big fitness studio brands, you likely don’t think of Xponential Fitness. In fact, you may never have heard the name before.
But you likely have heard of Pure Barre, Club Pilates, CycleBar and Row House. And if you haven’t already, you likely will soon know of Yoga Six, StretchLab and AKT, a dance studio. All of those brands have one thing in common—they are part of Xponential Fitness, one of the biggest names you may never have heard of in the boutique studio space.
The fact that Xponential is not well-known in the industry doesn’t phase Anthony Geisler, CEO of Xponential, which is based in Irvine, California.
“I am building Xponential because I want to do something that others have failed at and that no one has done successfully,” he said. “We are not really trying to make Xponential a consumer-facing brand. It is really focused on the [individual] brands and the workouts that we are doing.”
Pure Barre, Spartanburg, North Carolina, with its 517 locations, and Yoga Six, San Diego, with its seven locations, are the latest brands to be scooped up by Geisler, joining Xponential’s growing portfolio in the second half of 2018.
Much of the initial growth was spurred by financing from private equity firm TPG Partners. In May 2017, TPG bought Club Pilates from Geisler, who had purchased it in 2015. after he sold LA Boxing to UFC Gyms in 2013. By the time he sold the brand to TPG, he had grown it from 80 franchise territories to 475. Recent growth of Xponential came afer TPG partner Mark Grabowski left TPG in 2018 to launch Snapdragon Capital. He and Geisler then bought out TPG’s stake in the fitness company. Today, Geisler and Snapdragon are majority owners of Xponential Fitness.
Geisler’s plan is for Xponential Fitness to house the best brands in every boutique studio vertical, he said.
With seven boutique brands in different verticals now in its stable, Geisler is on his way to including a brand under Xponential from each of the eight cores he sees in the boutique market: Pilates, barre, cycling, rowing, yoga, stretch and dance. The eighth core is running, he said, noting that he is in pursuit of a running brand but not divulging the potential acquisition.
The portfolio of Xponential brands allows landlords to create a “fit row” at their strip malls while working with one company instead of dealing with multiple companies, Geisler said. Xponential has already created next-door-neighbor offerings in several cities, including in Orange County, California, where a Row House is located next to a Club Pilates and in Louisville, Kentucky, where a CycleBar stands next to a Club Pilates.
Having studios in close proximity to each other is a win-win-win—for landlords (who need to fill their brick and mortar spaces), Xponential (who wants to sell more franchises) and members (who want easy access to multiple fitness options).
Another win for members is a pass that allows them to upgrade their memberships so they can attend classes at more than one Xponential studio brand.
Despite the cross offerings, the Xponential brands don’t have shared services. Instead, Geisler prefers to silo each business with its own marketing staff and its own president who runs their brand their own way.
“I wanted siloed businesses because I stay in my own lane,” he said. “…What I am good at is finding a brand, rebranding it, building my own way, tweaking it, building a great team and then going and distributing the product via franchising.”
Staying in his own lane means finding good leaders for each brand. He ensures that each brand’s president matches that brand. Ryan Junk, for example, is president of CycleBar and would never be president of AKT because he fits with CycleBar, Geisler said.
And each brand maintains close ties with its founder, many of them staying on board as consultants.
“I keep my founders around because I believe founders are really the heart of the brand, and ripping the heart out isn’t really a good idea,” Geisler said.
The Future of Studios
Anyone who thinks that the studio trend will cool because people will tire of paying for a singular activity may not want to voice that opinion to Geisler. He has heard that “garbage” for 16 to 17 years, he said, even back to his LA Boxing days when people called boxing a fad.
“I don’t know when this downfall is coming or when this ‘fad’ is over,” he said. “I heard that Pilates was a fad. I have heard it all. Yoga was a fad until it was a staple. I just don’t know why it’s going to go away.”
Boutiques offer a specialized experience with like-minded people, which creates a community that big box clubs can’t replicate, he said. In a 40,000-square-foot club, members find a lot of people who “aren’t all your people,” he said.
“If you go into a Pilates class with 12 Reformers, you identify with those 12 people in there because they are all doing the same thing,” Geisler said. “It’s like being in a car club. You pull up and there are 50 Corvettes. You all love Corvettes, and you all love each other because you love Corvettes.”
And for that sense of belonging, people are willing to pay more, he said, just as people pay more for Starbucks coffee not because it is better coffee than at other coffee shops or than home brewed—but because of the sense of community people get at Starbucks.
“That is what boutique is,” he said. “It is a specialized experience, and I don’t know that the human psyche is going to ever get sick of paying for a specialized service that allows them to belong and have community. I think that is what we are selling. I don’t think we are selling a wood Reformer with a spring that goes back and forth. You think SoulCycle works, Fly Wheel works, CycleBar works because we are teaching them how to pedal? You have a bike; go pedal outside. Oh, well, there is weather outside. Well, put it on stilts in your family room with a TV in front of it. There is Peloton. It’s not what it’s about. It’s about people coming together and going ‘Yeah, I love to bike. I love to Spin and you do, too. And there are 50 of us.’”
Finding the Next Big Thing
Determining which fitness trend will be the next big thing in boutique studios keeps Geisler on his toes.
“My job is to go figure out what’s next and let all those people, like Massage Envy, go promote that stretching is something and allow me to ride the wave,” he said, referencing the fact that Massage Envy introduced assisted stretching at its studios in 2017 after he had noticed a stretching trend and had already begun the StretchLab deal.
It’s similar to what happened with Pilates where sports stars such as basketball player Kobe Bryant and actors such as Sylvester Stallone began sharing how they did Pilates, he said.
“So, that wave has nothing to do with me,” he said. “It has nothing to do with Club Pilates. That is a movement that I saw three years ago that is happening now. And what I wanted to do was to be open on the street corner for the moment Kim Kardashian buys her mom a Balanced Body Reformer and they put it all over TV.”
And when people can’t buy their own Reformer, they will look for a place they can go to use one. That’s when they will find Club Pilates, he said.
Geisler’s ability to find the next big trend and his desire to build something new and successful is what has helped grow Xponential in multiple verticals, and he doesn't seem to be slowing down anytime soon.
[Editors' note: This article has been revised to reflect that TPG Partners no longer owns Xponential Fitness.]