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Houston's Newest Retail War: Boutique Fitness

Orangetheory Fitness
Orangetheory Fitness

Grocery, pizza, burgers. Houston's retail landscape is a battlefield for quickly growing retail businesses. Boutique fitness purveyors are the latest fighters to enter the ring. 

"There's a lot of jockeying in the fitness business right now," NAI Partners Retail Senior Vice President Jason Gaines said.

Between spinning classes, yoga, climbing gyms, boxing gyms, Pilates and CrossFit studios, consumers have never had more options to stay healthy. The days of mindless treadmill workouts in one large gym may be fading. 

"The fitness model is getting away from the big-box model. Square footage is shrinking, everyone is becoming a specialist," Gaines said. 

Between 2012 and 2015, attendance at boutique fitness studios grew by 70%, with these smaller, more focused mini-gyms now making up 35% of the $25.8B fitness market.

That is a fundamental shift in the fitness business model. For years, gyms like LA Fitness and Life Time offered low fees with long contracts, relying on the sheer number of members to keep the lights on. Now, with less space in more expensive areas, boutique fitness providers are moving toward on-demand services and shorter contracts. One group is driving that change more than any other: millennials. 

“They don’t want an annual gym membership commitment and a contract,” Greg Skloot told the LA Times. Skloot co-wrote a recent report on fitness industry changes titled The Club of 2020. “They want to be able to make physical fitness choices on demand, and they are willing to pay for it.”

That means shelling out up to $50 for a single class. Some locations even charge cancellation fees.  

"If you're not careful you can get a $700-a-month fitness habit real quick," Gaines joked. 

Houston's Inner Loop has been a hotbed of boutique fitness action. Define Body & Mind, Ryde, SoulCycle, Revolution Studio, Orangetheory Fitness and a variety of CrossFit studios have all taken space in Houston's urban core. The trend is spreading. Last month, Orangetheory opened in The Woodlands, its 13th location in the Houston area since entering the market in 2014. Orangetheory CEO David Long foresees 30 to 40 Houston locations.

Houston's strong retail fundamentals will likely keep the sector very competitive as boutique studios compete for locations and big-box gyms continue to look for backfill space.