Mark Wahlberg-backed fitness group F45 Training posted a valuation of more than $ 1.4 billion on Wednesday when it first sold shares to the public and offered investors a bet on whether consumers would go to the gym after the coronavirus pandemic would return.
The fitness franchisee, who has grown to include more than 1,500 sports clubs that offer high-intensity interval and circuit training, raised $ 300 million in its IPO when it sold its shares for $ 16 per share. A shareholder in the company also raised $ 25 million when he sold part of his stake in the company. The Austin-based company initially marketed its shares to investors at prices between $ 15 and $ 17 per share.
The company’s IPO follows an idle year for the health and fitness industry. The International Health, Racquet & Sportsclub Association estimated that 17 percent of gyms in the US closed in 2020, with big brands like SoulCycle closing some studios permanently. The owner of the New York Sports Club has filed for bankruptcy.
That pain was reflected in F45’s business, which posted an 11 percent drop in sales in 2020, while losses doubled to $ 25 million, according to a filing with the Securities and Exchange Commission. The boutique fitness chain debuted on the NYSE more than eight months after it completed a merger with a specialty acquisition company called Crescent Acquisition Corp, which originally valued F45 at $ 845 million.
Mark Wahlberg will host the opening of F45 training at Miramar MCAs on June 11, 2021 © Phillip Faraone / Getty Images
The F45 filing indicated that consumers were returning quickly after the gyms reopened: of the 618 franchise studios that have been open the longest since the temporary closure, average revenue per club was above pre-pandemic levels, it said it. More than 1,400 of his studios have reopened.
“We believe our performance over the pandemic has underscored the resilience of our business model,” the company said. “Despite the challenges posed by the Covid-19 pandemic, such as the temporary closure of our studios, we successfully sold new franchises and opened new studios in 2020.”
Wahlberg invested in the group along with family office FOD Capital in 2019, and the company said it also hired athlete David Beckham and model Cindy Crawford to help promote its brand.
F45 said it will use the capital to pay off some of its debt and buy assets from Flywheel Sports, the boutique indoor cycling chain that closed last year.
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According to Landon Luxembourg, an analyst at the ThirdBridge research group, the fate of fitness franchises like F45 depended on the extent of employee return to the office after the pandemic, which could determine gym use versus reliance on high-end staying-at -home options, like pelaton.
“It will all depend on work from home and how employers are slowly getting closer,” he said. “Even with personal experience, many employers are very inclined towards a hybrid model.”
F45’s listing comes at the same time as workout apparel brand Fabletics, backed by actress Kate Hudson, was tapping banks to plan its own IPO, which it hopes will raise $ 500 million. The subscription-based sportswear brand, which is controlled by the TechStyle Fashion Group, reported a sales increase of more than 20 percent year-on-year in 2020, according to a trend announced by competitors like Lululemon, whose sales were also around the The number increased twice over the same period.
