(Reuters) - SoulCycle Holdings LLC, the U.S. indoor cycling chain that describes its classes as a “dance party on a bike,” is mulling an initial public offering as part of a review of strategic options, according to people familiar with the matter.
The review has been prompted by SoulCycle’s founders, who sold a majority stake in the chain to gym chain Equinox Holdings Inc in 2011 and are now evaluating ways to sell their remaining stake, the people said, asking not to be named because the matter is private.
SoulCycle is working with Goldman Sachs Group Inc (GS.N) as it examines its options, the people added, stressing that no decision to pursue a specific route, such as an IPO, has been made. The company’s valuation could not be established.
Representatives for Goldman Sachs and real estate investment firm Related Companies LP, which is an investor in Equinox, declined to comment. Representatives for Equinox and SoulCycle did not respond to requests comment.
An IPO for SoulCycle, which charges around $34 for a 45-minute spin session, is considered attractive because of the brand’s loyalty among its clients. Many SoulCycle classes with popular instructors sell out in a matter of minutes, and some customers pay up to $70 a class for perks such early registration and a concierge service.
The New York-based chain has more than 36 locations in the United States and plans to open 50 to 60 studios worldwide by next year. Around 50,000 people ride at SoulCycle every week, according to the company’s website.
SoulCycle accounted for only 12 percent of Equinox’s earnings in the 12 months to the end of September 2014, yet it is the fitness chain’s fastest growing segment, according to Moody’s Investors Service Inc. Equinox had consolidated revenues of about $820 million in the 12 months to the end of September, according to Moody’s.
SoulCycle was founded in 2006 by moms Elizabeth Cutler and Julie Rice, who opened their first studio on New York’s Upper West Side.
Boutique fitness chains catering to specific workout methods like spinning, yoga and barre, with no monthly membership fees, have been growing more popular while traditional big box gyms have come under pressure. Town Sports International Holdings Inc (CLUB.O) said in February it was exploring strategic alternatives including a sale. Life Time Fitness (LTM.N) is also speaking to private equity firms about a potential leveraged buyout, sources have told Reuters.
Additional reporting by Mike Stone in New York; Editing by David Gregorio