Barry’s Global CEO Joey Gonzalez joins Yahoo Finance Live to discuss post-pandemic recovery, retaining talent, expansion plans, class offerings, and the outlook for competition within the health space.
BRAD SMITH: Workout brands, some of them face an uphill battle following COVID 19. They're looking to recover to pre-pandemic attendance levels. One brand in particular though, is looking to expand its focus from the treadmill to the bike with the launch of Barry's Ride. Barry's Global CEO Joey Gonzalez joins us now in studio. Joey, great to see you live in living color, in person here.
OK, there's been so much of the strategy that we've been watching play out. In fact, many of our team members too, we have either, by ourselves or as a team, tried out Barry's too, just to get our workouts back in order here.
So as people are going back in person to these experiences, what have you seen in comparison to pre-pandemic times and how Barry's is trying to recover?
JOEY GONZALEZ: So in terms of our recovery, we sort of benchmark success as pre-COVID attendance. Very excited to say that as of last month, we are at 120% total attendance across the country. We're trailing a little bit around 90% to 95% for same stores. But just to give you an idea of how steep that curve was, as of March, April, so five months ago, we were at 60%.
BRAD SMITH: Wow.
JOEY GONZALEZ: So it's been a tremendous amount of growth in a very short amount of time. We owe a lot of that to so many wonderful new clients trying Barry's for the first time. We've had over half a million people across the world try Barry's. And it has been interesting to see some of our older clients coming back, reintroducing Barry's to them, and then sort of like ramping back into this workout after what they've been doing at home. That has definitely been--
JULIE HYMAN: Yeah, as someone who's tried it before and who tried it now, yes, there is definitely the journey, the post-pandemic journey here. I'm curious also about instructors. I mean, when you talk about anything from Barry's to Peloton to any of the sort of marquee fitness brands out there, the trainers are very important. Have you had a harder time finding people? Are there are people who, during the pandemic, said they wanted to do another profession entirely, for example?
JOEY GONZALEZ: Yeah. I mean, first of all, you're absolutely right. And I'm a trainer. That's how I grew up through the Barry's family. And we really prioritize our talent. They're essentially our product. And they build the relationships with all of our clients.
So throughout the pandemic, we raised money twice to make sure that we could keep all of our full-time instructors employed the entire two to two and a half years. So luckily, we retained a lot of our top talent.
JULIE HYMAN: Are you paying them more now than you were before, just out of curiosity, pre-pandemic?
JOEY GONZALEZ: Yes. We've had some comp adjustments all throughout. But we've ended up now with a compensation structure that's meant to compensate instructors more than what they were making 2019.
BRAD SMITH: Talk about by--
JOEY GONZALEZ: The way, sorry, just wanted--
BRAD SMITH: Yeah.
JOEY GONZALEZ: We did have a lot of instructors sort of go and do their own thing during the pandemic. And the majority of them, I'd say around 50% to 60%, have since tried to come back, some successfully and some not.
BRAD SMITH: And it's also the type of instructor that you're bringing in too now, especially when you think about the expansion in something like Barry's Ride and how you listen to customers who perhaps have had experiences with some of your competitors out there and have wanted to be on a cycle but also want to increase their strength training perhaps too in tandem.
JOEY GONZALEZ: Yeah.
BRAD SMITH: What went into that kind of decision and expansion? And what does that rollout look like, especially as you're kind of bringing in this new facet into the Barry's experience?
JOEY GONZALEZ: Yeah, I'm glad you asked because I'm so excited to talk about Ride. I'm a CEO-founder, so very entrepreneurial. So innovating, which is one of our core values, is my favorite thing to do. And we have been expanding this Barry's original concept for two decades now. And we continued, through COVID, opening new markets, Austin, Denver. We did infill in New York, in Chicago, in LA. We opened Frankfurt, Berlin, Copenhagen.
And now, the second phase of our development out of COVID is actually introducing a new modality called Ridelift, which replaces the treadmills with the bikes.
BRAD SMITH: After a period where a lot of people have been on bikes, stationary bikes in their homes, doing some of those home workouts with Peloton or some of the other connected devices.
JOEY GONZALEZ: And some people have asked, well, was that what inspired us. But my plans for Chelsea back in 2010, my architectural renderings actually always had Ride in them. So this has been over a decade in the making. I always wanted a concept that was maybe more approachable and cast a wider net for new clients.
And we tested it right in about February to March of 2020, really good timing, and had to shut it down because of the pandemic. But we did notice anecdotally a lot of people who said to us, I was so afraid to try Barry's, and now I actually feel more comfortable because there's something about that bike that helps people come in over the treadmill.
JULIE HYMAN: It's interesting that you bring up accessibility because I think-- I mean, Barry's can be a little intimidating, if I'm honest. And not only that, the price point also, especially in this time when people are-- there's a lot of demand on their wallets for basics. And then you look at a $38 price point, at least here in New York, that's a lot for a 50-minute workout.
JOEY GONZALEZ: It is. And Barry's isn't for everyone, even though our mission statement is to transform lives worldwide. We understand the size of Barry's is still only at 85 studios, as compared to some of our competitors that are in the thousands around the world. So we understand that it's a specific client.
We also understand that what we're offering, I think, is a really compelling experience. Not only are you getting the best workout in the world with efficacy at the core, you're also getting liquid gold to wash your hair with Orbe hair care products and Dyson Hair Blades and a much more beautiful buildout in locker rooms and showers. So it's definitely a more premium experience. And for people that don't feel like there's value there, there are plenty of alternatives.
BRAD SMITH: There are some publicly traded, of course, companies within this space, whether they be kind of that in real life, the IRL fitness experience of a Planet Fitness, where people are kind of just taking it upon themselves or an F45 that we just saw go public via SPAC last year. And unfortunately, you get kind of caught up within that SPAC craze. And with all of that in mind, what does that even look like for a company like Barry's too in the future?
Is that something that you think about? And how do you retain the culture of the company too as you even evaluate what that may look like going public?
JOEY GONZALEZ: So first, not really something we've been entertaining. Have an incredible relationship with my private equity team. And was grateful over the past two and a half years that I had their support through many, many difficult decisions. I'm just happy that we haven't been beholden to shareholders to make those decisions and have no immediate goals to go public for Barry's.
JULIE HYMAN: All right, Joey, thanks for coming in.
JOEY GONZALEZ: Thank you. I'll see you in class.
JULIE HYMAN: Yes, definitely. I know. Now I'm going to have to look on the schedule and see when you're teaching. That's the next goal.
JOEY GONZALEZ: I love that. We'll let you know. And we'll send all of you free classes, on your staff.
JULIE HYMAN: Oh, well, that's very nice of you. CEO Joey Gonzalez of Barry's Global, appreciate it.