SoulCycle CEO Melanie Whelan insists her company’s indoor cycling workouts are not a fad.
Founded in 2006, SoulCycle has amassed a cult-like following for its 45-minute spin sessions set to party music in a dark studio. Some critics speculated that the craze was dwindling when the company withdrew its plans to go public last year.
The company has surely endured its ups and downs, including a leadership shakeup when its cofounders stepped down in 2016. But Whelan says that the company, which has been majority-owned by Equinox since 2011, continues to grow its revenue and diversify its business.
An IPO is “not on the table right now,” Whelan said in an interview with CNN’s Poppy Harlow for the latest Boss Files podcast episode. “The company is highly profitable and well-capitalized, so it’s not something that we’re looking at right now.”
And the company has never shuttered one of studios, she added. It has 90 locations across the US and Canada.
Instead, it is focused on expanding the brand’s reach beyond the studio walls. The company is eying further international growth and hosting pop-up events, such as “Sound by SoulCycle,” with live music.
Whelan also did not rule out selling a bike similar to those available from Peloton – the professional indoor cycling company that sells bikes for the home and charges a monthly membership to stream live or on-demand classes remotely.
When asked if an at-home SoulCycle experience may be coming in the future, Whelan said: “We’ll talk to you about that later.”
Peloton has been up against SoulCycle since it was founded in 2012. In August, Peloton was valued at $4 billion and the company is reportedly considering an IPO. SoulCycle’s IPO was expected to value the company at around $900 million.
Both SoulCycle and Peloton sell spinning at a hefty price: SoulCycle’s classes range in price depending on location but one session in New York, for example, can cost $36. Peloton bikes cost about $2,000, plus a membership fee of $39 a month for streaming classes.
A report from analytics firm Second Measure showed Peloton’s popularity surpassing SoulCycle’s in the third quarter of 2018. That’s based on its analysis of the number of credit card and debit purchases made during the quarter to either toward SoulCycle classes or Peloton membership. Second Measure analyzed a pool of 4 million US consumers. If the same customer makes multiple transactions in a quarter, the customer is only counted once.
Whelan pushed back on this analysis and comparison to Harlow, calling it “inaccurate.”
“It’s a little bit of a different business model that we’re in,” said Whelan. SoulCycle measures active users based on customers who’ve gone to class within the past 12 months, versus the past quarter as Second Measure does.
Recent data from Second Measure provided to CNN shows the trend in Peloton’s growth continuing to rise in the fourth quarter of 2018. During the quarter, Peloton had 63% more customers than SoulCycle, according to Second Measure’s analysis. That’s up from 4% more customers in the third quarter of 2018.
So while Whelan is steadfast that the SoulCycle brand continues to resonate, so too does the Peloton brand.
“What we’ve seen is that an opportunity really does exist out there now, because people are time-starved,” said Whelan. “We’re looking for ways to connect with us outside of the studio – we think there’s a real opportunity there.”
For now, SoulCycle customers can listen to playlists at-home when they are reminiscent of the energy in studios but can’t make it there.
