Gym members are ‘coming back to the clubs' but also want digital options: EQUINOX president
EQUINOX President Scott DeRue joins Yahoo Finance Live to discuss the global gym brand's attendance in the late-pandemic, models to design unique fitness experiences, fitness market trends, and inflation.
ALEXIS CHRISTOFOROUS: Welcome back, everybody. Americans are heading back to the gym after two years of at-home fitness. With a look at how the pandemic is reshaping our workouts is the president of Equinox, Scott DeRue. Scott, good to have you on the show again.
I know that Equinox is a global brand. You guys have over 100 gyms all over the world. So just set the stage for us and tell us what foot traffic looks like right now compared to, let's say, a year ago or the height of the pandemic.
SCOTT DERUE: Sure. Alexis, thanks for having me and it's a pleasure to be here. Our business today is stronger than it's been at any point since March of 2020. So if you look at that along two dimensions, check-in volume-- just how often and how frequent our members are engaging with us, just take the last two weeks, for example-- each week, we have set new records in terms of check-in volume since March of 2020.
So our members are coming back to the clubs. You can also look at it in terms of demand for the Equinox experience in terms of new sales. And if you look at new sales over the last eight months, we're outperforming sales from 2019. So demand is strong and engagement is increasing.
KARINA MITCHELL: Scott, this is Karina. I feel like I need to step up my game, because I can't get to the gym downstairs in my building let alone to Equinox. But my two older kids are big fans of Equinox, so they forget about the building and they head over to your facilities. So you know, that's great.
I'm wondering, though, even though you are seeing more people looking to go back to the gym physically and be there in-person, are they still looking for flexibility? And if that's the case, how do you adjust your approach? Do you still look at digital training and invest in that space? You know, what is your sort of omnichannel approach, if you will?
SCOTT DERUE: Our vision for Equinox is that omni multichannel experience. And we've positioned Equinox to be the leader in providing an unparalleled luxury experience across both digital as well as physical. And so if you take our fitness clubs providing an unparalleled luxury experience in the physical environment with our digital products-- Equinox Plus, our connected hardware providing that elevated upscale experience digitally as well.
But here's an interesting data point that tells you a bit about how the consumer is shifting. If you look at our digital Equinox Plus content, approximately 30% of that content is consumed in our clubs. And so we're meeting the consumer where he or she wants, whether it's at home, on the road, or in our clubs, both with digital and physical.
And that is the Equinox vision. And Equinox is, quite possibly, the best, most well-positioned company to provide that unparalleled experience across both digital and physical.
ALEXIS CHRISTOFOROUS: Scott, I'm curious how closely you all are watching this Peloton drama unfold. And do you see this as creating an opportunity for Equinox and your brands?
SCOTT DERUE: Well, I mean, we're certainly following the news like everyone else, not only with regards to Peloton, but also what's happening we're generally in the digital fitness market. And the trends that we're seeing, I think, speak to the power of that omni multichannel vision that we have for Equinox, where our consumer is telling us they want to engage in our clubs, they're coming back to the clubs at record levels, but they also want that digital experience that can provide a highly personalized, curated experience tied to their goals. And we're integrating that with the clubs in ways that our consumers, our members are really excited about. And that's where we're going in the future as well.
ALEXIS CHRISTOFOROUS: And I'm also curious how inflation is sort of playing out for you at Equinox. I'm curious what membership is now at your club. And I know rents are going up. It's costing more to keep your workers. So how is that playing out for you?
SCOTT DERUE: Like every business, almost like every sector, inflation is impacting all of us. And as you noted, it's on the talent side with wage increases, rent, vendors in terms of providing the equipment and the supplies that you need to provide our members with that high luxury five-star experience. So certainly, we're feeling the pressures of that inflation. And like we're seeing in pretty much every sector of the economy with regards to price increases, you're seeing that in fitness generally as well.
KARINA MITCHELL: And then, Scott, I want to ask you, what sort of plans do you have? I know there was talk about going public via SPAC. Is that something that's still under consideration for you?
SCOTT DERUE: At this time, we do not have any plans to pursue a SPAC.
ALEXIS CHRISTOFOROUS: And just really quick, I wanted to follow up on the membership question. How much what's the average membership right now? And have you had to raise that price because of inflationary pressures?
SCOTT DERUE: We have. Again, like nearly every business-- I was listening to your segment before this one in terms of food and grocery-- certainly, prices for fitness, Equinox but also other facilities, have increased over the last 12 to 18 months.
ALEXIS CHRISTOFOROUS: All right, Scott DeRue, President of Equinox, thanks for stopping by today.