Planet Fitness prepares for 2021 expansion as competitors struggle
Ready to get that dad bod back in shape? Planet Fitness is counting on it — with big plans in 2021 to add 100 additional locations, invest in advertising and grow its digital offering.
The 3 top anxiety-inducing places of 2021…
Restaurants, theaters and gyms.
All 3 were forced to close at the beginning of COVID but by Sept, 87% of fitness clubs had reopened. That hasn’t stopped consumers from avoiding gyms — 60% of consumers haven’t returned and here’s how bad gyms had it:
- 6,800 US gyms were permanently shut down in 2020 (17% of all locations)
- Big gym chains like 24 Hour Fitness and Gold’s Gym filed for bankruptcy in 2020
Shutdowns were too much for these gym chains — which borrowed aggressively to expand in the past few years.
The gym operator coming out on top…
With 2,124 locations at the end of 2021, Planet Fitness is one of the largest gym operators in the US — known for its low-cost $10/month membership (vs. an average of $50 with other gyms).
Since Planet Fitness went public in 2015 — its gym locations nearly doubled, net income increased from $4m to $118m in 2019, and its stock is up over 4.3x.
During COVID, several large gym chains went under, but Planet Fitness’ stronger financial position helped it survive:
- Sales were down 80% during the peak of COVID but by the end of 2020, sales were only down 35%
- Net income fell from a gain of $117m in 2019 to losing $15m in 2020.
- Partnered with iFit to launch a digital subscription for at-home workouts at the start of COVID
Despite the pandemic, Planet Fitness managed to open 130 new stores in 2020.
For investors… Let’s get (your portfolio) physical
While its competitors are struggling, Planet Fitness is taking the chance to expand — a move that could put it further ahead post-pandemic. Here’s how Planet Fitness could benefit from a recovery:
- More gym visitors as employees begin their daily commute to the office
- Growth opportunities through its digital subscription offering — which could complement its existing gym membership
Its stock has already risen more than 4x in the past 5 years but the next big move could come as the company goes for its next goal — hitting 4k gym locations.