Tuesday, September 15, 2020

[UPDATE] Flywheel Spins into Bankruptcy, Liquidation Likely

The brand that invited riders to "never coast" was apparently doing just that.  Flywheel, which had for the past decade been riding the wave of cycling popularity, will reportedly close all of their remaining studios, according to several sources close to the fitness company.  In Atlanta, the New York-based business had two studios, one in Buckhead Village District (fka The Shops Buckhead Atlanta), the other at Regions Plaza (1180 West Peachtree Street) in Midtown.  The company previously operated a third area studio at Avalon in Alpharetta but it closed last year as part of what was then an 11 studio nationwide closure.  

Ruth Zuckerman co-founded the popular SoulCycle studio in 2006 before leaving to start rival Flywheel in 2009.  A September 2015 article in Business Insider claimed that Flywheel was SoulCycle's biggest threat.  While Flywheel was no doubt a threat to SoulCycle, the bigger threat to them both [that was not even mentioned in the article] was then upstart Peloton.  

In 2017, Flywheel launched their own "Home" stationary bike to compete with Peloton.  The following year, Peloton sued Flywheel claiming Flywheel copied its at-home bike technology and infringed on its patents.  The case was settled this past February when Flywheel admitted that it copied the technology and agreed to "stop infringing Peloton's patented technology."  Flywheel in turn shut down the virtual classes that were connected to its in-home bikes. Peloton announced after their legal victory that it would let Flywheel customers swap out the $1,500 bikes for a used Peloton bike for free.  

Enter COVID-19.  

Just weeks after the settlement with Peloton and about two months removed from an announced plan to be acquired by Town Sports International, the pandemic caused the company to temporarily shutter all of their studios.  Flywheel reportedly laid off 98% of its 1,200-person staff. Town Sports, owner of New York Sports Club and other chains, dropped its plans in April to buy Flywheel and this past Monday declared Chapter 11 bankruptcy.  

ToNeTo Atlanta first got wind of struggles at Flyhweel in 2019 but things seemed to have quieted down.  This past weekend, things escalated again with several Atlanta based instructors posting to their personal social media accounts that Flywheel was shutting down. The news went unconfirmed and nearly ignored until today when it was reported that Flywheel had filed for Chapter 7 bankruptcy in New York late Monday and reportedly plans to wind down all operations

One could make the analogy that Flywheel is to Peloton as Blockbuster was to Netflix.  Flywheel had a good thing going and did not seem to innovate (or replicate as the case may be) until it was too late.  

At its height, Flywheel operated 42 studios across the country.  As of this week the company's website indicates it operated only 26.  SoulCycle by comparison operates nearly 100 studios, including outposts at the Shops Around Lenox in Buckhead and Ponce City Market while Peloton has already surpassed 100 retail locations worldwide with one location open at Lenox Square in Buckhead and a second coming soon to Avalon in Alpharetta

Are you surprised to see Flywheel closing all of their studios?  Are you a former Flywheel customer who now prefers Peloton or SoulCycle?  What would you like to see open in place of the Flywheel in Buckhead? 

Please share your thoughts below  


Anonymous said...

I use to take spinning classes with Ruth Zuckerman, who was the instructor, at the Upper Westside Equinox in NYC back in the early/mid 2000. Too bad about her business (if she still has a stake in it). Peloton definitely has changed the studio cycling industry.

KER said...

Ruth Zuckerman left the company in 2018. Interestingly, I listen to the podcast How I Made This and the founder of Peleton, John Foley, mentioned he initially approached Flywheel about an at home bike. Much like Netflix approached Blockbuster, the rest is history...

I was a Flywheel member for 5 years and left when they did a huge price increase, but it was a great workout with excellent instructors! I think home workouts are now the future...

Anonymous said...

Working out in a group while at home, is a game changer. What used to take 2 to 3 hours (drive to the location, get dressed, take the class, socialize, change out of workout clothes, drive home), now takes just over 1. You lose the social aspect, but that was never significant anyway. At home is quickly becoming the present, and is most certainly, the future.

Related Posts Plugin for WordPress, Blogger...