Following the removal of Covid restrictions on indoor spaces and a renewed interest in sports with the start of the Olympics this week, Dan Williams, co-founder and CEO of British sportswear retailer WIT Fitness, explains the opportunities for brands in partnering with gyms:
“It is now very easy to launch a sportswear brand across social media channels, but increasingly hard to stand out.
One way to do so is to have your own physical store, around which you can build a community – the customer can buy into the brand and, most importantly, experience the product.
This is exactly what we did at WIT: building our model around physical and digital from day one. We had options very early on to partner with two big UK gym chains, however, we wanted full ownership of our own experience, and were concerned that our brand would become solely associated with these gyms too early in our lifecycle. For instance, if a clothing label goes into Virgin Active gyms, it runs the risk of being swallowed up by [association with] the brand.
Saying that, the issue is that small brands are largely priced out of the option to open stores, by the huge capex and ongoing rent costs. We overcame this by running a pop-up strategy for 12 months across east and central London in 2016, which gave us an opportunity to launch the brand with physical experiences, while attracting investment money for a larger physical expansion. We opened our permanent combined physical store and gym in St Paul's in the City of London in 2018.For brands that can’t or don’t do this, partnering with gym chains can be a great alternative and there have been some stand-out success stories, such as Lululemon and its nationwide partnerships with Equinox and Barry’s Bootcamp, and also locally in London with boutique gyms Sports Edit and Core Collective.
It is an attractive option because they are usually short-term lease deals – at least initially – they are often structured around revenue share rather than fixed rent, there is very limited capex involved, and, usually, you get your product in front of your target consumer.
However, it can also be fraught with danger. Whether it is right or not for it will depend on where the brand is in its lifecycle, whether bricks and mortar is part of the future strategy and how good a match the gym is for its target consumer.
Largely, the success stories are when established sportswear brands partner with gym chains – they are already renowned brands in their own right, so there is no danger of any loss of brand equity by partnering up with the gym chain, and its data has confirmed that its consumer is in those physical sites.
The WIT deal with CrossFit is not a traditional gym-clothing brand partnership, as we will largely not be placing our products in CrossFit affiliates. WIT has been licensed to produce CrossFit-branded clothing, which we will then wholesale to CrossFit affiliates [of which there are more than 15,000 worldwide]. Affiliate gyms are independent entities that pay a franchise fee to use the CrossFit methodology. Only affiliated gyms will be able to sell CrossFit-branded clothing. The clothing we are putting in its affiliates is white-label CrossFit branded, and we will help it wholesale its own clothing to its gyms.
We will continue to sell our own WIT-branded clothing direct to consumer rather than go via third-party gym partners, so that our brand stays independent. We want to maintain control over the WIT brand, while helping CrossFit add value to its affiliates, which will own the CrossFit clothing retail themselves, therefore having an additional revenue opportunity.CrossFit members are our core customer – we know that from all of our demographic data – so its global database will be driven to our website and stores. [The deal] is beneficial to us because CrossFit will promote us to its affiliates as a wholesale partner. This will boost our global awareness and customer acquisition opportunity.
I am not ruling out in the future placing WIT in certain gyms or CrossFit affiliates, but we would have to be confident the brand would be represented as we would want, so that the quality of consumer experience is maintained. We believe it is also potentially a good avenue for international expansion, and may well work with gym chain partners across Asia-Pacific, the Middle East and South America, alongside the CrossFit wholesale.
My advice would be to consider where your brand is in the lifecycle before committing to gym partnerships. There is no doubt it can be a cost-effective way of reaching your consumer physically and this can help a brand stand out.
You also need to know exactly who your consumer is before committing to any partnerships, as you do not want to create confusing messaging around a brand. If there are pop-up opportunities around physical retail in gyms and events, I would invest in that. These have served us particularly well, and are a brilliant way to get the product in hands. There are some great agencies and individual agents out there who work on short-term rents. We have always relied on property acquisition and disposal services company Locate Retail.There is not set structure for sportswear brands partnering with gyms, and each option comes with its own pros and cons. Partnering with gym chains can be a great alternative for brands big and small, and there have been some stand-out success stories.”