Life Time fitness leans into pickleball with Lululemon partnership, new courts and more

Ben Johns and Anna Bright play pickleball at the new Life Time at Penn 1 next to Madison Square Garden in New York City on May 4, 2024.

Mike Stobe | Getty Images

Life Time fitness is all in on pickleball.

That commitment to America’s fastest-growing sport was clear in New York City on Saturday, where one of the world’s top-ranked male pickleball players, Ben Johns, and former tennis great Andre Agassi were practicing their dinks and drops at Life Time’s brand-new courts.

It is all part of the upscale fitness company’s strategy to grow its brand by investing in pickleball.

To continue that goal, Life Time on Tuesday announced it is teaming up with Lululemon, naming the company as an official apparel partner of Life Time pickleball and tennis. The relationship includes selling Lululemon apparel online at Life Time clubs, in addition to collaborating on key pickleball events.

“This partnership highlights the extraordinary growth of these sports and brings together the best in athletic apparel with the best in tennis and pickleball experiences,” said Celeste Burgoyne, president of Americas and global guest innovation at Lululemon.

Life Time, founded in 1992, currently has more than 170 “athletic country clubs” across the country.

Such clubs are looking for creative new ways to get America moving again as the fitness landscape has evolved post-Covid. Life Time CEO and founder Bahram Akradi, an avid pickleball player himself, is betting that the hot, tennis-like sport will be that catalyst.

(L-R) Tyson McGuffin, Collin Johns, Life Time Founder and CEO Bahram Akradi, Andre Agassi, Anna Bright and Ben Johns pose for a photo at the new Life Time at Penn 1 next to Madison Square Garden in New York City on May 4, 2024.

Mike Stobe | Getty Images

“Pickleball is working. It’s packed all the time,” he told CNBC.

And it keeps growing. On Saturday, Life Time unveiled Manhattan’s largest indoor pickleball destination, just blocks from Penn Station. The 54,000-square-foot club has seven street-level pickleball courts that officially opened on April 15.

Akradi said the company has installed new playing surfaces or converted tennis courts nationwide and now offers more than 700 pickleball courts across the country. It has become the largest provider of permanent pickleball courts in the country.

Akradi estimated that the company has invested between $50 million and $100 million into pickleball already, and it has brought in 6% to 7% of Life Time’s membership dues.

“That’s substantial. That’s a big number,” he said.

Life Time has also partnered with professional pickleball to host nearly a dozen pickleball tournaments on the company’s courts, with some even being broadcast on national television. This week, for example, the Atlanta Open, part of the PPA Tour, will compete at a Life Time in Peachtree Corners, Georgia, with 16,000 people expected to be in attendance.

Andre Agassi and Anna Bright play pickleball at the new Life Time at Penn 1 next to Madison Square Garden in New York City on May 4, 2024.

Mike Stobe | Getty Images

Agassi recently started playing pickleball, which is a lower impact sport, after racking up years of wear and tear on his body from his illustrious tennis career.

“I think wherever we are now, there’s going to be 10 times the people playing the sport in the next five to seven years,” Agassi told CNBC. He said he thinks pickleball will succeed because it promotes healthy habits, builds community and has a low point of entry for beginners.

In February, Life Time appointed Agassi as the inaugural chairman of the company’s newly formed pickleball and tennis board, where he will be tasked with elevating the sport’s profile, programming and leagues.

“My hope is that it grows in college and grows in the Olympics,” Agassi said.

Off the court, Life Time is now offering advice from top pickleball player Johns. The company announced last month that he and his brother Collin will be providing members with 70 instructional videos to help players take their game to the next level.

“We partnered with Life Time because they are very into spreading pickleball and their members want to get better,” Johns told CNBC.

Johns has had a front-row seat to the exponential growth of the sport and said he has seen his salary grow 10-fold since 2021 as pickleball has captured more sponsors and media rights.

Already, Life Time’s pickleball strategy is showing early results.

While Life Time’s stock was down about 23% from March 2023 to March 2024, its first-quarter earnings report showed total revenue growing by $85 million from March of last year, adjusted EBITDA up more than 20% and net memberships up 38,000.

Analysts blame the recent poor stock performance on a combination of macro, balance sheet and interest-related concerns.

“LTH remains, in our view, the most underappreciated story in our coverage and perhaps in the broader consumer space,” a Guggenheim analyst wrote on May 1.

Source: https://www.cnbc.com/2024/05/07/life-time-fitness-leans-into-pickleball-with-lululemon-partnership.html

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