Is your gym boring? Here's what the fitness industry is doing to woo Gen Z.

By Charles Passy

Old-school gyms face financial challenges, but experts say new approaches will bring in new members

For many Americans, the gym has long been defined as a place to lift weights, put in some time on the treadmill and take a quick shower.

But workout destinations have been increasingly tweaking that formula in order to thrive. They're offering specialized approaches to fitness, such as boot-camp regimens or Pilates classes. Or they're wooing the influencer crowd with "posing rooms" and eclectic design elements.

These new-school models are especially relevant in light of the fact that Blink Fitness, a prominent and traditional-minded New York-based gym chain owned by industry giant Equinox, recently announced that it had filed for Chapter 11 bankruptcy and is looking for a buyer.

But Blink isn't the only gym chain that has faced financial challenges in recent years. One noteworthy example: Gold's Gym, a brand that rose to fame during the bodybuilding craze of the '70s and '80s, filed for bankruptcy shortly after the start of the coronavirus pandemic in 2020, though it has since re-emerged under new ownership.

Ultimately, industry professionals and experts say gyms can no longer afford to maintain the playbook of the past, especially if they want to appeal to Gen Z and a whole new market of potential clients.

"People are just not willing to pay and accept a boring gym," Chris Gilbert, chief executive of Gym Informer, a website that reviews locally owned fitness centers, told MarketWatch.

Examples abound of what might be dubbed the "unboring gyms." Take Core24, a gym with locations in South Carolina and North Carolina that bills itself as "the destination for modern fitness culture." It offers a creatively conceived space where, in addition to workout equipment, you'll find signage declaring, "Enjoy ur f-ing workout."

'People are just not willing to pay and accept a boring gym.' Chris Gilbert, chief executive of Gym Informer

Or Legacy, a South Florida chain with six locations that defies the traditional fitness-center layout: Instead of putting the aerobics-class area off to the side, owner Manning Sumner decided to put it front and center.

"It creates the energy," Sumner said.

Legacy also tries to distinguish itself with its own workout regimen, one that it calls Partner Interval Training - or PIT - which is aimed at increasing "speed, power, endurance and metabolic rate."

Of course, other gyms and fitness centers have gone the niche-oriented route to great success. Solidcore, a Pilates-focused gym, launched about a decade ago with a focus on the core-oriented workout and with a target audience - namely, women over 40 - in mind. It grew to 100 locations and was acquired last year by a private-equity firm, netting founder Anne Mahlum a reported $88.4 million.

Mahlum argues that the more niche you are in the fitness world, the better.

"You need to have a unique offering," she said.

She adds that despite all the interest in at-home fitness options and programs during the early days of the pandemic, people have clearly voted with their wallets that they still like being at a physical gym and interacting with fellow gym-goers.

"They say, 'It's my social hour,'" Mahlum noted.

To that point, Peloton (PTON), the company associated with its exercise bikes and at-home workout programs, has faced its share of financial difficulties and is no longer quite the darling of the fitness world. Barry McCarthy stepped down as the company's CEO earlier this year, with the move coming after Peloton's stock had fallen 91% during his two-year tenure.

Peloton didn't respond to a MarketWatch request for comment.

Still, it's not as if gyms are guaranteed success, as the Blink bankruptcy shows. The pandemic, which forced establishments to shut down for months, left many gyms in a weakened financial position and also left many gym-goers permanently rethinking their workout regimens. In effect, it disrupted the continuity of the industry, says Arielle Rose, an analyst with market-research firm IBISWorld.

"Although direct COVID-related restrictions have lifted, many gyms are struggling to regain their footing," she said.

And some industry experts say the inflationary woes of recent years haven't helped gyms: When consumers feel the economic pinch, they often cut out the extras in their life - and a gym membership is often considered such a luxury.

Hence, another way for gyms to succeed is by winning the pricing wars. That's been the story behind the rise of Planet Fitness (PLNT), the chain that became known for its $10-a-month memberships (though that's now risen to $15 for new members). The chain reported that it added 1.7 million members in 2023, bringing its total to 18.7 million.

"Planet Fitness is showing when there's a right offer, customers will sign up," said Simeon Siegel, managing director of equity research with BMO Capital Markets.

Camille Dash contributed to this article.

-Charles Passy

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08-17-24 1404ET

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