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Equinox Closes In on New Funding to Challenge Peloton in At-Home Fitness

Gillian Tan, Sridhar Natarajan and Crystal Tse
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Equinox Closes In on New Funding to Challenge Peloton in At-Home Fitness

(Bloomberg) -- Equinox, the luxury gym chain operator and majority owner of SoulCycle Inc., is in advanced discussions to secure new funding from investors including private equity firm Silver Lake, according to people with knowledge of the matter.

The investment would help the fitness company expand a digital platform designed to compete against rival Peloton Interactive Inc., said the people, who asked not to be identified because the talks are private. Equinox is working with an adviser to help secure an investment, they said.

A deal -- the value of which couldn’t immediately be learned -- hasn’t been finalized, but could be reached as soon as this month, one of the people said.

Representatives for Equinox and Silver Lake declined to comment.

Peloton, which had recovered from its price slump following its Sept. 25 initial public offering, fell 6% to $27.87 in New York trading Thursday. Fitness equipment maker Nautilus Inc., the owner of brands including Bowflex, Nautilus and Schwinn, surged 29%.

Boycott Spat

The New York-based company, led by Harvey Spevak, is searching for new investors after some members boycotted its brands in response to a decision by part-owner Stephen Ross, the billionaire founder of Related Cos., to host a fundraiser for President Donald Trump’s re-election campaign. Spevak, who is also an investor, told members that Ross had no role in running the company and touted its donations to causes promoting diversity and inclusivity.

Equinox operates 100 clubs across the U.S., U.K. and Canada, and has separately announced plans to enter the Middle East. Equinox has counted Morgan Stanley Chief Executive Officer James Gorman and celebrities such as Andy Cohen and Hilary Swank among its members, while its SoulCycle brand has been featured on television shows and movies.

The company, which is also backed by consumer-focused private equity firm L Catterton, in August announced a multi-brand digital platform that sought to capitalize on members’ desire to work out at home or while traveling. It has announced plans to offer a SoulCycle bike designed for at-home use and a proprietary Woodway treadmill to bolster the platform.

Healthy Priority

“In the $4 trillion wellness economy, consumers have demonstrated a clear desire to prioritize a healthy lifestyle, even when the demands of day-to-day life get in the way,” the company said at the time.

Equinox also has expanded beyond fitness clubs to travel and talent management for its instructors. Last summer, the company opened its first luxury hotel in Hudson Yards, a project on the west side of Manhattan that was developed in part by Ross’s Related.

(Updates with Peloton shares in fifth paragraph)

To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Sridhar Natarajan in New York at snatarajan15@bloomberg.net;Crystal Tse in New York at ctse44@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, ;Alan Goldstein at agoldstein5@bloomberg.net, ;Liana Baker at lbaker75@bloomberg.net, Michael Hytha

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