The likes of Manduka and Physique 57 successfully branded relatively low-cost workouts as a way of life
The bar(res) have been raised.
When architect Peter Sterios was practicing yoga in California over two decades ago, most classes took place in dingy community halls or churches—not the airy, natural light-filled studios of Instagram lore. Practitioners used blankets as support pads; rudimentary mats, when used, were still known as “rugs.” It was seen by some as a non-narcotic way to get high. When Sterios took his business plan for an eco-friendly yoga gear maker around, potential investors told him to try something else.
This year, Manduka, the company Sterios founded, marks 20 years in business. Its mats, which retail in the low three figures, have been used by the likes of Lady Gaga and in 2008, it was acquired by a New York private equity firm. “Yoga used to be practiced by [hippie] refugees maintaining some connection to the human development potential of the 60s,” he tells Moneyish half-jokingly. “But as an architect and designer, I saw potential for a revolutionary shift.”
Sterios isn’t the only one to have benefitted from the boutique fitness boom of the 21st century. Pricy classes at yoga, pilates and ballet barre studios are now key components of a U.S. health club market that in 2014 was valued at $22.4 billion—they’re such a behemoth that Fitch Ratings recently noted their threat to traditional gyms.
The lifestylization of fitness took off in 2001, when the supermodel Christy Turlington appeared on the cover of Time magazine in a yoga pose. By then, finance-savvy fitness aficionados were already branding their pre-coffee workout as cool and healthy. “With so many studios, it was an undifferentiated industry. When that happens, price fall,” says Rohit Deshpande, a Harvard Business School professor who co-wrote an authoritative study on the branding of yoga. “One way out is to explain what your brand stands for.”
That’s what Jennifer Maanavi, a Columbia Business School graduate, did with Physique 57. A former client at the beloved Lotte Berk Method studio, which popularized ballet barre-based exercises in the U.S., she co-founded P57 with fitness instructor Tanya Becker after seeing how distraught Berk’s disciples were when it shuttered. “Women were crying when they realized their elixir for good health was disappearing,” she says. “That’s what made me realize this could be bigger than a local exercise class.”
But if Berk’s method was the province of a certain kind of New York woman, Maanavi had her eye on a wider crowd. (The 57 in its name comes from its flagship studio’s location on 57th Street in Manhattan, signaling equal access to the uptown and downtown crowds who can afford $30+ classes.) The co-founders added significant cardiovascular activity so that its mostly female clientele could skip additional trips to the gym, meaning Physique could be sold as an efficient one-stop fitness shop. It now operates in three countries.
The same lesson was replicated downtown by Tara Stiles, the model turned Strala Yoga founder once dubbed the “coolest yoga instructor ever” by Vanity Fair. Her studio has outposts in Germany, Barcelona, Singapore and Tokyo and she boats over 140,000 followers on Instagram. “Her positioning was that Strala isn’t about spiritual mumbo-jumbo or religiosity, but relieving stress,” says Deshpande. And well-heeled, secular-minded urbanites duly flocked to her.
Yoga is “one of a few fitness activities where you can’t be listening to your iPod or checking your email,” says Cathy Quain, Manduka president. “It’s like surfing where you have to be present.” In turn, her company’s marketing efforts focus on how yoga can give busy people a break and some “personal space.
Then, the business folk found a way to bring the cool factor out of the studio via merchandising. According to A.T. Kearney, the so-called “athleisure” industry was valued at nearly $46 billion last year, up from around $35 billion in 2014. The pioneer was Lululemon, the Vancouver-founded apparel maker whose logo now marks the derrière of every fashion-conscious fitness nut in the Western hemisphere and did $2.06 billion in sales last year. Manduka also introduced a clothing line last year. (That long, lithe muscles on attractive people are accentuated by yoga and barre probably helps.)
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“Lululemon successfully straddled the nexus of being an apparel company and a yoga company, while being much more fashion forward than Nike,” says Deshpande. That strategy is now employed to a certain extent not just by Manduka but also fitness studios like SoulCycle, Barry’s Bootcamp and Physique 57. At the latter, sales of studio-branded $80 capris and $22 grippy socks are an ever-growing component of business. Perhaps the most extreme signifier is Peloton, whose $2000 bikes double as furniture in the homes of cycling heads. “We have an identity around where we work out, [perhaps] more so than with our actual professions,” says Maanavi. “It’s a pretty common dating question—‘where do you work out?’”
And the moment fashion comes into it, the celebrities aren’t far behind. Manduka’s Sterios remembers being inundated with emails for months after Lady Gaga appeared in Tokyo with a Manduka mat wrapped with a gold chain. Physique 57 was visited by Sarah Jessica Parker—that emblem of Manhattan femininity—when its first studio was still under construction, while the likes of Kelly Ripa have sworn by the studio’s efficacy. “They’re not the lifeblood of the business but especially when a studio is launched, they bring helpful notoriety to a brand,” says Maanavi.
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