Equinox has too many next big bets to count

It took the Equinox Group—the parent company of luxury gym chain Equinox, Equinox hotels, and Soulcycle—around five years to recover from COVID. But the company has recovered, claiming that 2025 will be a record year from a profitability perspective.

This year, it announced big plans for expansion. Harvey Spevak, executive chairman and managing partner of Equinox Group, tells us about the company’s plan to open 40 clubs in new markets, its expansion into the Middle East, and the real reason it ditched Kiehl’s for Grown Alchemist.

In the next couple of years, Equinox plans to open 40 new clubs. What is driving this growth? 

We’ve always been a high growth company leading up to COVID. COVID was pretty rough. The way we thought about our strategy was to rebound the business and then get back to growth and transformation.

We’re back to high growth from a financial perspective. From a growth perspective, there’s tremendous demand for the Equinox brand and the Equinox offering in existing markets, and also in lots of new markets. Over the last 12 months, we’ve built a pretty robust pipeline, like you’ve mentioned. That 40 locations is probably closer to 50 at this point. We’ve opened a bunch of locations in new markets this year. We opened our first in Philadelphia Rittenhouse, which is performing extremely well; better than we expected.

We opened our first in Seattle in June, also exceeding our expectations. In the fall, we’re opening our first in San Diego. By the end of the year [we’ll have opened], San Diego, West Loop of Chicago, another one in New York, another one in Los Angeles and Santa Monica. We’re excited about all of these. We’ll open five locations between now and by January.

How do you decide which new markets to enter?

Our real estate team is very knowledgeable about all the markets where we’ve always wanted to go. When I say the markets, it includes cities as well as zip codes, if not by block. That’s a big part of why our unit economics are so strong. But the world has changed in terms of where there is demand.

While there continues to be great demand in some of our existing markets like Manhattan, Southern California, Northern California, there’s new markets where we didn’t exist before. I mentioned Philadelphia or Seattle, but then there’s also the South. We recently announced our first location in Nashville that’ll open next year. We think South Florida will become our third biggest market outside of New York and Los Angeles. And a lot of that’s because of the migration of people from New York and other markets.

We’re opening our first location in West Palm Beach next month. We sell memberships in advance of opening, and the response has been absolutely outstanding. In West Palm Beach, we started selling memberships in June—the worst time of the year it could be selling memberships, but we did that because we were going to open in November and we’re going to open with a member count that is higher than what we thought we would achieve in four years. 

We’ve all read about the migration to Florida, but what do you think are the factors leading for places like Nashville to become new markets?

These markets are evolving rapidly and there’s greater desire for health and wellness broadly. It’s become a bigger priority during and coming out of COVID than ever before. That’s a global phenomenon. Then you think about the Equinox offering and the authority the brand has around high-performance living; it’s just kind of a perfect storm.

Are you opening more Equinox hotels?

We have a pipeline on the hotel side of around 10 to 12 new hotels. The difference is the gestation period for a hotel is much longer, particularly when you’re building a new hotel as compared to a club. It takes years. Our next hotel is opening in the Red Sea in Saudi Arabia in spring of 2026.

Why the Red Sea?

Because there was demand for our brand, our hotel, our club, our entire offering. We also have branded residential there, which is another part of our offering now. But there was a lot of interest in bringing us to a resort location. It’s a beautiful setting. It’s some of the most magnificent water you’ve seen in the world. It’s an undeveloped piece of real estate in Saudi Arabia. So in partnership with the government there and the Sovereign Wealth Fund, they have built out a big area, a marina. Us and some other hotels are going to be operating there.

Ours is designed by David Rockwell, and we’re excited about that. We’ve already announced another hotel in Saudi Arabia. There’s one unannounced that’s coming—there’s potentially one, if not two, more in the region. Then we’ve also announced one in Nashville. There’s one we’re working on the Caribbean. It’s remarkable who stays at our hotel now. It’s literally a who’s-who of Fortune 100 companies to people out of Hollywood or in the music industry. 

Why is the Middle East an attractive location for you to set up shop?

It’s fascinating what’s been going on there over the last four or five years. And it varies by country and city, but there’s so much interest in health and wellness, hospitality, living a healthy lifestyle, and the Equinox brand. The brand awareness is very high because a lot of the 30 and 40 year olds in the Middle East have been educated here in the U.S., and they’re educated in a lot of cities where we have big portfolios of clubs.

After billionaire real estate developer Stephen Ross, whose company Related is a majority owner of Equinox, held a fundraiser for then-republican candidate Donald The President in August 2019, a lot of customers boycotted Equinox and Soulcycle clubs. Saudi Arabia doesn’t have a great track record when it comes to respecting human rights. Do you worry about the reputational risk to your brand this might have?

Fair question. When Stephen did the fundraiser back in summer of 2019, we definitely [were] given a very hard time by our members, our prospective members, what we call our alumni members. It was a time when cancel culture was a very big thing, and we definitely took our hits during that. But what I would also say is that, [it] is because people are so emotionally attached to the Equinox brand.

We got a list of all of corporate America that at that time was donating to Donald The President or the Republican Party. It’s a who’s-who of American household names. We don’t donate to any party. We’ve always been, in effect, Switzerland and we believe we’re an inclusive community. I don’t mean that just by race or gender. Everybody can have their political views, everybody can have their religious views. That’s the magic of Equinox, that it’s such a diverse and inclusive community, both from our employee side and from our member side.

What struck me was because people love us, they expect more from us. At CVS where you buy toothpaste, nobody cared that CVS was one of the biggest donors to Donald The President at the time. Nobody was canceling them. 

Stephen Ross, who is obviously a significant investor and a partner, made a personal decision to do something with supporting Donald The President. It was really from a business perspective more than anything, but that was his decision. It was unfortunate that it affected Equinox and SoulCycle at the time. As we move forward, we’re not going to weigh in on politics, we’re not going to weigh on religion, but people are allowed to have their personal points of view. That’s how America was built. It was an unfun time, but we’re always sensitive about who we partner with, big and small. When you talk about the Middle East, everybody is partnering with a lot of these countries, including Saudi Arabia. And Saudi Arabia is transforming and undergoing substantial reform. We’re not alone in deciding that it’s okay to do business there. 

Equinox is in the middle of transforming its wellness offerings—last year you launched Optimize, a $40,000-a-year health and longevity program that involves lab testing, personal training, and nutrition and sleep coaching. Tell me about your investments in that category.

It’s soon going to be a $10 trillion global category. There’s no brand that’s better positioned than Equinox to take advantage of what we refer to as high-performance living. If you listen to the true respected longevity gurus, they align with this philosophy.

We talk about it from a science perspective. How do you live a high-performance lifestyle? We talk about movement, which is working out and being active. We talk about nutrition—I prefer the word nourishment because nutrition is medicinal. Nourishment is just eating well and eating in a way that gives you energy and fuel for the body. Then there’s recovery and sleep is at the core of that, but there’s other aspects to recovery at this point. A lot of the biohacking comes into that.

Then there is community. Nobody’s written that narrative more so in the community than we have. We introduced Optimize last year through a partnership with Function Health [which does lab testing]. We take biomarkers [from blood tests]  and then you are assigned a concierge who quarterbacks your program with a team of specialists, your personal trainer that is referred to as a coach, your nutrition coach, your sleep coach. Then we retest to see how the progress is going.

You also have programs to support members using GLP-1s. Has their increasing prevalence changed the business?

I don’t think it’s had a dramatic effect on the business, but I definitely think the needs and wants of certain members have changed. So early on when GLP-1s exploded, there was lots of press out there asking, does this mean gyms are dead? But what the world has learned through lots of science and research and the different experts is if you use that as a kickstart, but then compliment it and move towards living a different lifestyle, meaning all the stuff around being active, strength training, eating well…those are the people that are getting the greatest results from GLP-1. We saw it as an opportunity to create a special GLP-1 training program. I think what’s definitely part of the GLP-1 effect is that people realize strength training is more important than ever before.

You’ve mentioned Optimize, your GLP-1 program, and Equinox Living. There’s another chain, Life Time, that has similar offerings. How do you view that competition?

There’s some similarities in the programming, but the offerings are very different. They are much more of a rural to suburban play, and we’re much more of an urban play. We’re much more luxury, high touch service oriented and more boutique-oriented versus. But there is some overlap programmatically. I think that at the end of the day though, what I would say is if you want the Equinox experience, you’re not going to get it at Life Time. If they want to follow a lead on some aspects, that’s up to them, that’s flattering. I have a lot of respect for what they’ve been able to accomplish, but what we’re doing is very unique and our community loves what we do. So I don’t really view it as competition; I just view it as someone else operating in the category. And I think there’s plenty of room for both of us and others.

Why did you ditch Kiehl’s for Grown Alchemist products in your locker rooms?

I am going to be too transparent. I’m going to get yelled at by my team afterwards. Kiehl’s was a very successful relationship for a very long time—since 2009. But through all the changes of their leadership, which seemed to be very frequent, the product was, in our mind, a little stale, and they weren’t innovating around it. And there were some things in the product, which in the world of getting clean were not good ingredients, and they were reluctant to change [them]. So we said, this is not the right product for our members.

Despite what they’ve said in the market, we decided to end the relationship. Interestingly, I’m going to point out—and this is where I’m really in trouble—is that other brand that you mentioned, that started in Minnesota… they’ve picked up our sloppy seconds [and started offering Kiehl’s in their locker rooms]. Nobody likes sloppy seconds. That’s certainly not us.

So we ended the relationship. We decided to go another direction. There’s no doubt that the other direction caused an uproar. Clean is tricky, and Grown Alchemist is clean, but it comes with issues. It doesn’t suds as much. So anyway, to make a long story short in this regard. I would just say stay tuned for more announcements in the not too distant future. 

Were your customers asking for clean products?

There was some of that, but also we were looking to say, what’s the future here versus what’s yesterday? We felt that Kiehl’s was yesterday, and we wanted something more progressive. And so we went in direction. There’s no doubt a lot of our members love the direction we went in. And other members were like—as you saw on Reddit—what are you doing? This is ridiculous. You’re cheapening out. It’s actually more expensive. Just so we’re clear, it was not us cheapening out. [But] we have some things coming in the not too distant future.

What’s your own workout routine?

I’ve practiced what I preach. I’ve had the same coach for 20 years who’s been amazing. I strength train with him three times a week. Then separately, I love to sprint. I probably sprint more than I should, but I sprint probably four times a week and do cardio like six times a week. I eat really clean although I believe that pizza’s a separate food group because that is my kryptonite, that’s my weakness. I’m a big believer in the sleep side. I do all the biomarker stuff that I mentioned early on to inform this, but I make sure I get my sleep regardless of what’s happening. 

Which Equinox club do you visit the most?

That’s like asking which is your favorite child. I have twins, and I often joke about when I’m with one or the other, I tell them “you’re my favorite.” And then I tell the other one, she’s my favorite.

You’re going to be paying a lot of psychiatry bills down the line.

Probably, so far it’s worked out okay. But I like so many clubs for different reasons. Because my offices are at Hudson Yards, I use the Equinox at Hudson Yards most frequently.

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