🚲 Closing Time

Boutique studio operator Flywheel Sports is closing 11 of its 42 locations. The closures will impact studios in Atlanta, Austin, Los Angeles, Miami, Philadelphia, and the San Francisco Bay area.

This news comes amid a series of struggles for the company: 

• Fall ’18: Discounted Flywheel classes are offered on ClassPass.
• Dec ’18: Flywheel hired advisors to explore a sale but failed to garner interest. 
• May ’19: Kennedy Lewis, a lender to Flywheel, seized control of the company. 
• Aug ’19: The company announces studio closures as it pushes its at-home bike.

A sign of the times. The convenience factor of connected equipment is plain to see. It’s also challenging the core beliefs of studio operators, instructors, and devotees who are convinced that the in-studio experience is irreplaceable. In contrast, Peloton’s success is proving that—given the choice between saving time and showing up in person—we’d rather have more time. 

While it’s not simply a binary choice between group or at-home workouts, it is becoming painfully obvious that studios centered around a single modality are most at risk. If one piece of equipment paired with streaming content can mimic the in-class experience, an on-demand option will eventually rear its head. 

Zooming out: What’s more interesting, though, are the future implications for connected equipment and streaming content companies. If single-modality studios are at risk, surely digital fitness companies devoted to one format—be it cycling, rowing, running, boxing, etc.—are backing themselves into a corner. 

If that’s true, the winners of the connected fitness arms race will be the companies that are platform-, workout-, and location-agnostic. While Peloton has led the pack to date, Equinox may have changed the game, and who knows what’s next.

🔙 Circling back

Back in Issue No. 13, we included a report that had Rumble Boxing on the fundraising trail, seeking $200M at a $500M valuation. 

Update: Bloomberg is reporting that Rumble has yet to close the round due to lack of interest from VCs at the proposed valuation. For context…

• Rumble is a boxing-inspired group fitness concept based in NYC.
• Jan ’18: Equinox acquired a “significant minority” stake in the company. 
• The company has expanded, opening studios in NYC, LA, SF, DC, and Philly. 
• Nov ’18: Rumble announces “At Home 360” — a partnership with Technogym and SB Projects (Scooter Braun) to create streaming content delivered via Technogym equipment.

Red flags. Although the company has experienced tremendous growth while also making headlines as the preferred workout spot of celebrities like Justin Bieber, it’s possible that investors have cooled on cool fitness concepts. 

The ongoing threat from at-home options, compounded by stumbles by studios like Flywheel, may be setting off red flags with investors. ClassPass’s 2017 down round and SoulCycle’s abandoned IPO effort are also sure to come up in conversation. 

Looking ahead: While Rumble has made their out-of-studio intentions known, it’s possible that investors are taking a wait-and-see approach until after the initiative is live.

🎯 Missed the mark

Last year, the company formerly known as Weight Watchers made headlines when its wellness-focused rebrand to WW fell flat. While the move was seen as an attempt to appeal to millennials and Gen Z, the company is coming under fire for targeting much younger customers. 

What it is: Last week, WW introduced Kurbo, a weight loss app for kids and teens ages 8–17. The reception has been, well… pretty terrible. That’s mainly because, as many, many folks have pointed out, it’s a pretty terrible idea. For context...

• Kurbo Health, a mobile app aimed at combating childhood obesity, first launched in 2014. 
• WW acquired Kurbo Health for $3M in 2018.
• The relaunched app uses a “traffic light” system—red, yellow, green—to track food intake. 
• Users are rewarded for consistency with Snapchat-like “streaks”. 
• The program includes options for virtual coaching, guided meditation, recipe videos, and games focused on living a healthy lifestyle.

The backlash. From parents to nutritionists and dieticians, Kurbo has been criticized as being irresponsible and dangerous. The concern is that the app will create guilt and shame around eating certain foods, putting children at risk for an eating disorder. Plus, it’s seen as a ploy to get customers into the WW funnel at an earlier age. 

The takeaway: With the national childhood obesity rate nearing 20%, it’s clear that we’re failing to confront a serious issue. However, it’s also clear that a weight loss app for kids probably isn’t the answer. For readers of this newsletter, this represents an opportunity and a challenge… what solutions can health and fitness professionals offer to curb this trend?

📰 WHAT WE’RE READING

• This robotic exosuit will make you faster. 
• There’s no such thing as “healthy” alcohol.
• The plant-based meat revolution is not “inevitable”.
• Daily Harvest launches ready-to-eat snack balls. 
• The war on sugar hits juice boxes.