SoulCycle bets on a new brand, this one is off the bike

Key Points
  • Company is testing a new fitness concept.
  • SoulCycle CEO Melanie Whelan sees it as an extension of the company's brand.
SoulCycle looks to move beyond the bike
SoulCycle looks to move beyond the bike

Build on the soul, lose the cycle.

That appears to be the strategy behind SoulAnnex, a new offering from SoulCycle, the brand that basically launched boutique fitness just over a decade ago.

The company, which is owned by luxury fitness chain Equinox, is testing the idea at one studio in Manhattan's Flatiron area, known unofficially to the sweat set as the fitness district.

SoulAnnex has similar branding to SoulCycle, even its own clothing line. It also commands a similar lofty price, $34 for a 50-minute class. It has the same candlelit setting and same sleek style as its parent, but there is not a bike to be found. Instead, there are three floor-based classes: Align, Define and Move. In other words, stretching, strength and cardio.

At a recent packed lunchtime class, the sounds coming from the studio are the same as you would hear at SoulCycle — blaring beat, equally loud and inspiring instructor, and adrenaline-fueled cheers from the crowd.

"It's just my comfort zone," said Kim Januszewski, a SoulCycle devotee who had already taken a cycling class that morning. "It's a natural marriage because you're just kind of elevating what they already have with the component of the HIIT [high intensity interval training] class."

And that is exactly what Melanie Whelan, SoulCycle's 40-year-old CEO, is banking on — a natural extension of the brand, which now has 82 studios across the U.S. and Canada, with 20 of those in New York City, where SoulCycle began.

"For us, on the inside, we say we're in the business of community and personal transformation and fun, and it's really never been about the bike," said Whelan, who has been at the helm of the company since 2015. "We wanted to create a space for our riders to come together with our instructors and experience the best of SoulCycle off the bike."

Soul Annex class
Emily Gaffney | CNBC

The company's success stems from an almost cult-like following of riders who see themselves less as individual riders, but as a community, often socializing outside the studio and connecting on social media. The instructors are also quasi-celebrities, at least among local riders, and that is part of the strategy with SoulAnnex, that those same instructors will lead the classes at both studios.

"That's part of the energy, the accountability and the community that our riders tell us all the time that they want from us," Whelan said. "What we really heard from them is they were looking for ways to spend more time with us, not just on the bike but outside the studio."

Whelan said she is not concerned about diluting the brand with the new offering, yet there is always a danger of that.

"Most brands don't succeed when they cross the threshold from specialist to something more generalist," said Mark DiMassimo, CEO and Chief Creative Officer at DiMassimo/Goldstein, an advertising agency headquartered a few blocks from SoulAnnex. "I expect there are some bad reasons and some good reasons why they're doing this."

Case in point, SoulCycle has growing competition riding on its heels. Flywheel and Peloton, both cycling studios, have been adding market share quickly, and mainstream fitness companies are now offering cycling classes as well.

Soul Annex clothing
Diana Olick | CNBC

Flywheel recently launched a home cycling platform to compete with Peloton, which is fast building a home-rider cult of its own. Whelan did not rule a home option out for SoulCycle.

"Our riders are asking us consistently for other ways for them to spend time with the brand and with our instructors and we'll continue to look for ways to do that," she said.

Whatever the platform or preference, the bottom line is that as the fitness phenomenon grows and the cycling devotees of a decade ago age, they demand new options.

"The bike is no longer novel. This means more generalist competitors have incorporated it, and a new generation is coming on wanting to be new adopters of something new and fresh," said DiMassimo.

And SoulCycle is clearly onto that. If it can leverage the first half of its brand name seamlessly, then the Annex will multiply, but it will have to be careful not to displease its devotees, who might not like the idea of a second option in a specialty space.