Both SoulCycle and Planet Fitness will go public, hoping to expand their businesses drastically and cashing in on the expanding culture of fitness we’ve seen over the last five years. The high-end indoor cycling studio filed on Thursday, while the $2 billion franchise-model box gym chain has released plans to go public next week.
“If you work out and you go to the gym, what better investment than one of these two companies?” says Brian Sozzi, Special Features Correspondent for The Street.
There are some key differences between the two fitness brands, though, mostly in terms of the average client. “Soul Cycle is catering to the higher income consumer, who’s willing to pay for a class and then afterwards buy a ten dollar smoothie and [cycling] shoes,” says Sozzi.
While SoulCycle’s reach has been enormous in urban areas like New York and LA, some commentators worry that the planned expansion from 46 locations to 250 will give the brand trouble.
Sozzi suggests that they might not hit the limit just yet, but that they may eventually meet a cap to their growth. “Those next 200 locations are probably mostly going to be in those urban, sort of hipster areas. It’s when they want to get to 500 that it becomes interesting,” says Sozzi.
Planet Fitness, meanwhile, has proven its ability to thrive in the suburbs. With over 1,000 locations, it meets the needs of gym newbies and serious lifters.
As far as investing goes, Planet Fitness’ broader appeal might make it a better bet, compared to SoulCycle’s relatively narrow clientele. However, Planet Fitness might face challenges in the future as the demand for group classes becomes stronger and stronger, even outside the so-called “boutique fitness” market.
Other gyms to watch out for? While RetroFitness and Barry’s Bootcamp haven’t stated any plans to go public, it’s worth watching for any changes in their strategies as their peers make the move to the NYSE.