FITNESS: Pop Physique mulls selling stake to bulk up chain. By Subrina Hudson
Monday, August 31, 2015
Drive around certain L.A. neighborhoods and you’re sure to notice billboards featuring photos of suggestively posed, leotard-clad women or close-up shots of women’s rears in brightly colored undies.
No, those ads aren’t for American Apparel – they’re for Pop Physique, a boutique fitness gym with 20 outlets that’s taken an unconventional approach to its marketing and branding efforts since it first opened in Silver Lake seven years ago.
The strategy seems to be paying off: Pop Physique, which just moved into a new headquarters in downtown L.A.’s PacMutual campus, is gearing up to open additional studios in Pasadena, Venice and New York next month – on top of a studio at its new downtown office. The chain is also looking to raise outside investment for the first time, potentially even selling off a controlling stake.
Jennifer Williams, Pop Physique’s co-founder, said the bootstrapped company has been able to grow quickly but realized it would need help to open additional studios.
“We weren’t quite sure if we wanted to take on investment,” Williams said. “When you’re an entrepreneur and you step over to that side, you might get fired from your own company. There was a fear for a minute, just a thoughtful hesitation, but I think at this point it’s needed for growth.”
Pop Physique is looking for investors at a time when private equity firms have been shelling out big bucks for stakes in trendy fitness studios and when exercise generally has become big business – consider, for instance, the rise of yoga pants as everyday apparel.
Andrea Bell, senior editor of retail and consumer insights at trend forecasting agency WGSN’s Culver City office, calls the health trend “wealthness,” meaning health is the new wealth.
“Postrecession, people didn’t want to show off their Chanel bag or be seen in their Mercedes,” Bell said. “It’s a lifestyle trend and for investors it’s a quick win – the tech bubble is going to burst, real estate is going to fluctuate but people will always want to invest in themselves.”
Up an inch
Williams, a former professional ballet dancer and certified Pilates instructor, said that she and her husband, Deric, opened the first Pop Physique in Silver Lake in 2008 with an investment of $30,000. The original location has since grown to include two studios and serves as the company’s flagship gym.
Williams said that Pop Physique, which blends ballet and Pilates, has been a hit from the start, thanks in no small part to its first piece of advertising: a flier featuring a close-up shot of a woman’s derrière in bright green underwear. The fitness studio filled all of its classes the first week it opened.
While the company’s advertising still hews close to that first shot, the eye-catching flier was more a necessity than a thought-out strategy.
“At the last minute, our landlord said, ‘I’m sorry. You can’t put a sign up,’” Williams said. “So we were, like, How do you open a business with an address and no sign?”
Allyson Rees, an independent retail consultant in Los Angeles who has been teaching at Pop Physique for three years, said the fitness studio’s branding attracted her to take a class seven years ago in Silver Lake.
“That butt shot on the postcard?” Rees said. “I saw that and thought, What is this? and started taking classes.”
Of Pop Physique’s 20 locations, half of them are company owned. It has an office staff of 10 in addition to about 50 teachers, many of them former or current dancers and entertainers. Hourlong classes cost $25 each and memberships offering an unlimited number of classes cost $175 a month.
Williams wouldn’t disclose the number of Pop Physique’s members but said it’s in the thousands, including several celebrities such as fashion designer Trina Turk, actress Katie Holmes and members of L.A. pop-rock band Haim.
For the people
With its branding, pop-heavy music play lists and choice of locations so far, Pop Physique is aiming for a young clientele. And WGSN’s Bell said that young focus has paid off.
“They speak really well to millennials,” she said, pointing to the studio’s clothing line, which features tops printed with suggestive slogans such as “Down an inch, up an inch” and “Barre so hard.” Pop Physique even sells mugs emblazoned with the phrase “Barre Whore.”
“What they did was tap into the mind-set and essentially bank on it,” Bell said. “It’s not like 24 Hour Fitness or Equinox where people associate that with bankers and soccer moms.”
Still, in the seven years Pop Physique has been in business, the boutique fitness space has exploded with new gyms popping up and existing ones expanding. There’s CorePower Yoga, YAS, Exhale, Bar Method and Orangetheory Fitness, just to name a few.
Investors are taking note. L.A. fitness chain Barry’s Bootcamp recently received investment from Greenwich, Conn., private equity firm North Castle Partners for an undisclosed sum rumored to be as much as $100 million. In addition, New York cycling studio chain SoulCycle filed to go public this month with plans to raise up to $100 million.
But despite the seemingly saturated market, Williams said Pop Physique is still attracting strong interest from investors.
“People keep coming to us,” she said.
The decision to seriously consider taking outside capital came this year when the company decided to open its first New York location, currently under construction.
“It’s just going to take more capital to cover New York the way we’ve covered Los Angeles,” she said. “We need to go faster.”
The company’s plan is to open more locations by clustering in major metro areas. Right now, its focus is on New York. It also has plans to grow its retail offerings to include more than T-shirts – think leggings and jackets – and to replace its instructional DVDs with an online video subscription model for those wanting to practice routines at home or while traveling.
More money to grow the business is attractive but Williams said she doesn’t want to rush into anything. The company has been meeting with private equity firms and investment banks in New York and Boston, Williams said. She hopes to have an investment finalized by January.
“We need to work with the right people that are in line with our vision,” she said. “Because at the end of the day we did create it and we aren’t going to work with people that are going to take it in some other weird direction.”