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Private-equity firm TPG is acquiring Crunch Fitness through its growth-equity unit. Started in New York’s East Village in 1989, Crunch owns and operates more than 300 fitness centers across the U.S., Canada, Australia and Spain. Crunch began franchising in 2010—a move that Mr. Rowley said was “monumental” to the company’s growth. The franchise model has propelled the chain’s growth domestically and internationally. Today, about 50 locations are corporate-owned and nearly 300 are franchised under 88 franchise owners.With TPG Growth, Crunch will continue to expand its footprint and offerings. Mr. Rowley said the gym operator has focused on upgrading the interior of its locations and providing exercise classes, carving out a niche in the premium segment of high-value, low-price health clubs. The HV/LP model refers to facilities that offer a variety of amenities at affordable prices. Crunch is among the latest health club chains to trade hands in a sector that has become a robust landscape of private-equity activity.

2020 has not been kind to fitness clubs. Gyms around the US were ordered to shutter in mid-March in response to the spread of COVID-19. Since then, some clubs have permanently closed; others have reopened with tight restrictions. The pandemic gives Apple's Fitness Plus a unique opportunity, because shutdowns have driven a number of households to consider (or refocus on) at-home workouts. Ten percent of US households were using online fitness services before the COVID-19 pandemic, but that number has since grown to 14 percent, according to a recent Consumer Technology Association (CTA) study. The CTA also found that 53 percent of consumers who have owned connected fitness equipment since before COVID-19 are now more likely to use it — even as gyms return.

The Covid-19 pandemic took Peloton from a highly debated stock, with a heightened interest from short-sellers betting on a price decline, and turned it into a major stay-at-home winner. With gyms closed and people working from home, Peloton couldn’t ship its bikes fast enough to meet a surge in demand. It also introduced new equipment products at varying price points and lowered the price of its flagship bike. Analysts say such work-from-home trends helped bolster its total addressable market while helping the company benefit from strong word-of-mouth and save money on marketing its pricey bikes that need $39-a-month subscriptions to access most of their popular features and classes. Martin believes by the end of the year, Peloton will hit 1.6 million active accounts, much higher than her prior year-end estimate of 1 million. She didn’t expect 1.6 million until the end of 2021. She notes that a larger installed base for Peloton lowers its customer acquisition costs since it may have an easier time selling its treadmill to bike users, who may also drive sales through word-of-mouth. Meanwhile, the pandemic has devastated gyms, which could drive more fitness fans to at-home exercise.