Equinox losses nearly triple in the UK amid luxury sector woes
Equinox has posted a near-tripling in its UK losses as the fitness firm became the latest to suffer amid a downturn in the luxury sector.
The firm, which has just three sites in the UK – all in central London – posted a £21m loss for its 2024 financial year, a rise of 267 per cent compared to the previous year. The company’s net liabilities now stand at just shy of £100m since launching in the capital in 2012. Plans to open a fourth site in Shoreditch have since been abandoned.
Equinox UK, which is a subsidiary of New York based health firm Equinox Group, said it was reliant on financial support from its US parent to continue trading, while auditors “drew attention” to the “risks and uncertainties” facing the company.
The US group has on three separate occasions been given a ‘default’ or ‘selective default’ rating by S&P Global, meaning it had defaulted on at least some of its debt obligations. The firm restructured its debt in March last year, after which S&P removed its CCC “junk bond” rating and ceased rating the company’s debt.
“The directors are confident in the wider parent group’s ability to continue with any required funding after successfully completing a debt refinancing in March 2024,” Equinox UK said.
Luxury market challenges
The steep losses come amid wider challenges for luxury global brands amid subdued consumer sentiment and depressed spending.
A published last month by consulting firm Bain & Company warned luxury spending “historically sensitive to uncertainty, is coming under intensified pressure as luxury consumers’ confidence is eroded by current economic upheavals, geopolitical and trade tensions, currency fluctuations, and financial market volatility.”
“Luxury brands are contending with not only weakening consumer sentiment but also a growing disillusionment with their offerings among younger generations, notably Generation Z.”
Equinox, which charges several hundred pounds per month for membership to its high-end gyms in Kensington, St James’s and Bishopsgate, said total revenues rose 8 per cent to £20.7m, while the number of members rose by more than 600 to hit a fresh record of 5,434.
“The increases in membership numbers while actively managing expenses has resulted in the group continuing to raise cash from operations,” the firm said.
Equinox Group also owns cycling fitness group Soul Cycle, which has cut its London footprint down to just two sites. Another of its brands, Blink Fitness, filed for Chapter 11 bankruptcy in the US last year.