Covid-19 and the fitness sector

We are all aware of how important exercise is on our health – both physical and mental. During the first lockdown (now a distant memory!), when exercise was one of the only reasons to escape the house, the parks were filled with gym-goers: boxers, runners, yoga enthusiasts and people doing pull-ups from the trees. Joe Wicks was booming and people had time to exercise, whether it was at home, in a garden or outside in public spaces. Memery Crystal ran live-streamed yoga classes for its employees and the real estate department organised a streamed group HIIT class as a chance to connect with others and release some pent-up energy at the same time – it was great fun.

Whilst exercise has continued to thrive outdoors during the pandemic, it important to acknowledge the effect that Covid-19 has had on the fitness sector as a whole. Gyms re-opened on 12^th April and group classes resumed today with social distancing in place but sadly this may not be a reality for all gyms. Some have simply been unable to shoulder the large overheads and landlords will no doubt be looking to forfeit leases at the end of June when the end of the moratorium kicks in.

Gyms have had to adapt and diversify at lightning speed in order to survive, showing the strength of many businesses which have been some of the worst hit during this time. Those gyms lucky enough to have the money and ability to diversify have been reliant on technology and digital platforms in order to keep their client base, some having to create them within an incredibly short amount of time – the payoff has been priceless. Group classes have become a way in which people can exercise safely while also fostering a strong sense of community and togetherness which has been a lifeline for many. Digital platforms, such as Digme Online and Peloton, have meant that exercise has become far more accessible. However, not all gyms have had the infrastructure to move online or have chosen not to – the potential long term impact of the online forum on those business which rely on a studio based experience is huge. No doubt the digital nature of workouts will become a permanent part of the fitness industry going forwards, even once gyms start to re-open and the likes of Barry’s and Digme are likely to tread between their online classes and the studio. Those businesses which have relied and will continue to rely on studio experiences may suffer as a result.

Whilst those trainers running online streaming services have continued to work, many staff have been furloughed. The difficult realisation for the property sector has been the need for space diminishing instantly and striking a balance between landlord’s needs in terms of rental income streams and lenders and struggling tenants. Without co-operation from landlords, it is likely that many gyms will be unable to survive unless they have managed to secure rent deferrals, rent-free periods, rent concessions and rent suspensions. How accommodating landlords can be in many cases depends on their own circumstances.

Throughout this time, our real estate department has been on hand to provide strategic advice for both landlords and tenants and continues to do so; our clients have relied on us to negotiate rent free periods, we have drafted side letters to deal with rent agreements and we have drafted, negotiated and completed short term leases in a short timeframe which has saved our landlord client’s the burden of paying business rates on empty properties.

What the pandemic has shown us is how those companies willing and able to adapt can survive, even if the result looks completely different from anything they could have even known or expected before. It will be very interesting to see what the fitness sector landscape looks like now that gyms are fully open and how gyms will oscillate between the virtual world and the studio.

(Image via Unsplash)