Mainstream wellness industry built ‘on idea that you sign up, but never show up’: Equinox President

Equinox President Scott DeRue joins Yahoo Finance Live to discuss the luxury gym’s ‘We Don’t Speak January’ campaign, committing to the soul, core values, and beliefs of Equinox, being the opposite of the mainstream wellness industry, membership pricing rates, creating an inspired environment, and the outlook for Equinox moving forward.

Video Transcript

- Luxury fitness company Equinox has a message for newcomers to its gyms. Don't try and join. On January 1, Equinox banning people from signing up for a new membership on New Year's Day. It's part of their new campaign that they call We Don't Speak January. The company writing in a message, quote, "January is a language we don't understand. It wants you to start something when you should already be in the middle of it."

Here to discuss that and more, we want to bring in Scott DeRue, president of Equinox, joining us now. Scott, it's great to have you. This certainly has sparked a lot of conversation about Equinox. Some people are in support of it. Others have taken a massive issue. There was a headline from the "Miami Herald" that I want to bring up saying, quote, "stop gatekeeping fitness." So let me give you the floor. Explain this We Don't Speak January campaign and why you made the decision not to let members or new members join your gym on the 1st.

SCOTT DERUE: Thank you. And first of all, Happy New Year, and thanks for having me. This is driven by a core belief of who we are as a brand. And it's really about-- we all have positive change that we want to see in our lives. We all have goals. We all have results that we desire. And what we understand is that it requires commitment to achieve those goals and achieve those results. And commitment is the soul of our business. It's the soul of Equinox.

And the idea that our community really harnesses is that to achieve these goals and achieve our results that we desire, it's not a one day thing. It's an everyday thing. And that's really the message, the point of view, the brand philosophy that we're sharing with the world and that our community really resonates with.

- And, Scott, earlier today, we had on a rival CEO of yours from Planet Fitness. He said he had seen the ads. I want you to listen to his thoughts.

CHRIS RONDEAU: It's a judgment-free zone is what we call ourselves, right. And regardless of what your why is and the reason you want to get off the couch, whether it's January 1, July 1, you're doing it for your kids, you're doing it because you want to feel better and have more energy, we don't judge. So yeah. I saw that. But that's not us.

- So that's not us. Is this kind of like Globo Gym average Joes from "Dodgeball" dynamic? Or why does this fit your members and not theirs?

SCOTT DERUE: Look, our member community understands that commitment is what delivers the results. And the problem with, really, January is that the mainstream wellness industry, if you will, creates all the gimmicks, all the fads around the turn of the new year. And we believe that it's not about January. It's about a long-term commitment to achieving those goals and seeing the results that you desire.

And the thing about our Equinox community is our members understand that we're partners with them in that shared commitment. And the mainstream wellness industry is built on the idea that you sign up, but you never show up. And at Equinox, we're the exact opposite. We want you to engage because it's that engagement and that shared commitment that's going to help you achieve your goals wherever you are in the fitness journey, wherever you are in your life journey.

And I saw a survey the other day that said that 80% of people who sign up for traditional gym memberships in January never go in February and March. Think about that. At Equinox, it's the exact opposite. 95% or more every year of the members who sign up to be Equinox members in January, they show up in February, March, April, and beyond. Over 95%. And so we're very different than that mainstream wellness movement because of commitment being the soul and the heart of our business and our community.

- Well, Scott, let's talk about your members, the pricing that they must pay in order to belong to your gym. And maybe that's a reason why they are more committed than some of the members of other gyms because taking a look at the price that you could pay per month, we know it varies from city to city, but the average that you guys sent over, average cost, is $250 per month. And I know you have raised that price of membership pretty consistently over the last several years. Walk us through the pricing strategy there and I guess how you balance raising prices without getting too much backlash from your members that you value so much?

SCOTT DERUE: Well, it's about the experience. And it's about creating an environment where our members are inspired by our talent, our programming, with that shared commitment to helping them achieve their goals and their results. And what we've seen through the course of 2021 and 2022 as we've reemerged out of the pandemic is the demand to be part of the Equinox community has never been stronger.

9 out of the 12 months in 2022, we set all-time sales records. And as we've started 2023, the same is true. That momentum has carried forward. And it all comes back to the experience that we create, the community that we built all around this shared commitment that is long term to help people achieve their goals. We all have positive change that we want to see in our lives. We also know that that requires a commitment. And that commitment is the core of who Equinox is.

- Well, Scott, I was going to go get a drink. But you've inspired me. I'm instead go workout, buddy. I appreciate the pep talk. It'll be interesting if expensive gyms are recession proof in '23. Great to see you. Scott DeRue from Equinox. Great to have you.