Preview

Planet Fitness looks to Toys R Us and Sears’ real estate leftovers to expand its gym network.

WHAT HAPPENED: To open its planned 225 new gyms, Planet Fitness will occupy some of the vacant spaces left by now-bankrupt Toys R Us and Sears.

Why it matters

  • Planet Fitness’ footprint grew 60% between 2016 and 2019, to 1,800-plus gyms in the U.S.; the company has also seen 12 consecutive years of sales growth. As it rides the growing wellness economy—U.S. gym memberships shot up 37% between 2008 and 2018)—it still sees room to capitalize on the 80% of Americans who don’t yet belong to one. Though it seeks to open 225 new locations in 2019, it may grow its total footprint to 4,000 gyms in the future.

  • To ensure that this square footage will thrive, Planet Fitness is making a few strategic decisions. For one, inhabiting real estate made vacant by the Toys R Us and Sears bankruptcies will save the company the cost of building out its own infrastructure from scratch, though it will still have to spend on remodeling. But perhaps more importantly, Planet Fitness is partnering with retailers. After performing an internal survey, the fitness brand found that 76% of Planet Fitness members shop before or after their workout. In March 2019, it announced a partnership with Kohl’s, which will lease space to Planet Fitness next to ten of its stores—Burlington Coat Factory and Planet Fitness launched a similar collaboration. Not only are these retailers aligned with the price point of Planet Fitness’ audience (membership costs $10 a month), but putting these stores and gyms side by side also means that consumers are more likely to see them as a joint destination. In turn, this can drive sales and memberships at both companies, as well as increase foot traffic, as more consumers plan their workouts and errands together. The gyms could also help reinvigorate some of Kohl’s sluggish properties, which couples nicely with the retailer’s decision to allow Amazon customers to make returns at its stores.

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