Fitness membership club scaling up across southwestern Connecticut
After committing late last year to a big expansion of services in Connecticut, the fitness membership club ClassPass has expanded to more than 80 venues, the bulk of them in the triangle formed by Greenwich, Bridgeport and Danbury, but extending as far east as New Haven and north to Hartford.
More than 250,000 ClassPass members have access to about that many distinct classes today, to include traditional CrossFit workouts, martial arts, yoga, dance, fencing and even rowing. Members can download an app as well that will recommend other studios for them to try based on their history and preferences. Nationally, members have booked more than 70 million classes to date.
In southwestern Connecticut, rates range from $29 a month which ClassPass estimates covers anywhere from three to five sessions depending on the studio; to a $79 package with credits good for as many as 16 classes. Members can purchase extra studio time if they run through their monthly allotment, and the company will roll over a limited number of credits to a following month if left unused.
Besides getting the word out about its existence, ClassPass’ biggest challenge early on was a dynamic pricing model designed to cater to members by giving them discounts on off-peak workout hours, according to Kinsey Livingston, the company’s senior director for partner development. Many gyms had flat pricing in place, requiring them to change their own revenue model to adopt ClassPass.
“The biggest change that we have made to our revenue model is dynamic pricing, similar to the hotel industry,” Livingston told Hearst Connecticut Media. “The fitness industry had never really utilized dynamic pricing models. We’ve helped them with that.”
The New York City-based company also offers corporate memberships for companies to extend ClassPass as a benefit to their workers. The company also has gift cards that can be cashed in regardless of whether an individual belongs to ClassPass — but the gift giver must provide the recipient’s credit card number to cover any late fees, and the company automatically rolls that recipient into a regular monthly membership that can be canceled.
ClassPass financed its growth in part with backing from L Catterton, a private equity fund in Greenwich focused on consumer products and services that contributed to an $85 million investment last year in ClassPass. This week, L Catterton sold the CorePower Yoga chain to TSG Consumer Partners, with the firms not disclosing financial terms, with prior L Catterton investments having included Equinox and Peloton.
“We’re ‘category investors’ first, so we focus on categories with strong growth,” said Michael Farello, a managing partner who put together L Catterton’s investment in ClassPass, during a Bloomberg interview last year. “The average category that we are investing in ... is growing over 30 percent, and then we look for brands within that, that are distinctive.”
“The biggest change that we have made to our revenue model is dynamic pricing, similar to the hotel industry. The fitness industry had never really utilized dynamic pricing models. We’ve helped them with that.” Kinsey Livingston, ClassPass senior director for partner development