Exhale’s Expansion Strategy Continues

Exhale, the fast-growing day spa chain dedicated to mind and body fitness, has opened its seventh location, a 15,000-square-foot space downtown here.

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SANTA MONICA, Calif. – Exhale, the fast-growing day spa chain dedicated to mind and body fitness, has opened its seventh location, a 15,000-square-foot space downtown here.

Exhale Enterprises Inc., founded in 2003, opened its first door on Madison Avenue in New York, and subsequently expanded to locations on Manhattan’s Central Park South and in Bridgehampton, N.Y.; Boston; Chicago, and Venice Beach, Calif.

An eighth spa is scheduled to open in Dallas in June, and the company envisions opening as many as 20 locations in the next several years.

The two-story Santa Monica space is located just two blocks from the beach and one block from the Third Street Promenade shopping area, in the space formerly occupied by Aqua day spa.

While each Exhale location has a unique exterior, the design aesthetic inside the spas remains a combination of earthy natural elements combined with artifacts from around the world.

Like its siblings, the Santa Monica spa features a 200-year-old Indonesian wooden door leading to a fitness studio, a design element meant to symbolize an entryway to mind and body transformation.

But unlike the other spas, the newest location boasts a trio of Jacuzzis and soaking tubs and, of course, views of the Pacific Ocean.

With a handful of high-end gyms and yoga studios within a two-block radius, competition could be fierce, but Exhale president Annbeth Eschbach, in town for a soft opening last month, said she’s confident Exhale fills a niche with its combination of fitness, therapeutic body treatments and retail.

“When I initially researched the spa market, I saw right away that it was ripe for growth, but that most of the existing business focused on beauty and pampering, not mind and body fitness,” she said while walking through the Zen-themed chambers.

While Exhale offers a range of massages and skin care available in traditional day spas, the draw here is treatments based on Eastern medicine, practices such as acupuncture facials, cupping, vibrational therapy (using sound waves and vibrations made by metal tuning forks to stimulate muscles) and organ detox through acupuncture.

“People are initially skeptical about trying new things, but, clearly, there’s a market for them,” she said.

This story first appeared in the January 3, 2006 issue of WWD.  Subscribe Today.

It’s perhaps no surprise, then, that Exhale plans to open 15 to 20 more locations by 2009. With each location generating $5 million annually at full maturity, the company expects to soon make good on the initial $40 million investment from private equity firm Brentwood Partners.

An estimated 20 percent of each location’s volume is now generated by its retail space, which includes apparel, accessories and beauty products.

Among the beauty brands is an Exhale skin and body care range comprising six products: cleanser, serum, at-home peel, shampoo, conditioner and lotion. A facial scrub will be rolled out at the end of the first quarter and three more products will be developed next year.

There are also seven branded apparel items for men and women, and four more to come at the end of the first quarter.

While Eschbach acknowledged plans to grow the retail business, she declined to discuss specifics. Industry sources, however, speculated a freestanding retail format could be in the offing.

It wouldn’t be a stretch by any means for Eschbach, who twisted her lean limbs into a yoga pose and concluded, “The core of what we practice here is transformation, for both mind and body.”

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