SoulCycle has filed to go public and has its sights set on expanding its retail brand. The spin class company that began in 2006 with 31 bikes in an indoor studio has now grown to 38 studios across the country. The filing states that it plans to raise $100 million, but that is usually a placeholder amount.
SoulCycle has grown tremendously in a short time. Revenue has increased from $36.2 million in 2012 to $112 million in 2014. 95 percent of its revenues come from New York, Los Angeles and San Francisco.
According to the company’s filing, the branded retail line of apparel is sourced from a selective assortment of premium brands. SoulCycle says it strengthens riders’ engagement and allows them to garner a larger share of the riders’ spend. SoulCycle unveils a new, limited-production retail collection every month to generate excitement and a sense of urgency to buy the product due to its limited availability. The company believes there is considerable opportunity to expand the retail brand going forward.
The filing also stated that the apparel was a significant source of revenue, which they believe also serves as a badge of pride for their riders and an awareness-generator for their brand. While revenue figures aren’t broken out for apparel, other revenue outside of studio fees was $5 million for the first quarter of 2015 and $18 million for the year 2014.
Currently, three vendors account for 65 percent of retail sales for three months ending March 2015. SoulCycle says it maintains approximately 30 vendor relationships for the apparel line.
SoulCycle’s chief financial officer Larry Segall previously served as cfo at Equinox gyms and before that was senior vice president at Paxar Corporation which provided merchandise systems to retailers.
SoulCycle plans on using the proceeds to repay debt and pay $15.1 million to satisfy taxes upon conversion. SoulCycle borrowed $169 million under a credit agreement.