How KX Pilates used the pandemic to refocus and expand
After a distracting expansion into four new brands, KX Pilates refocused its core model and international expansion to hit its growth goals.
With more than 80 studios across the country, KX Pilates is Australia’s biggest Pilates franchise, and one of the most popular brands in the boutique fitness space.
Founded by Aaron Smith in 2010, the studios offer a dynamic form of reformer Pilates classes that combines traditional Pilates with the strengthening aspects of circuit training.
The business has evolved since Smith brought the new form of Pilates back from the UK, deciding to launch a franchise to encourage trainers to stay within the company.
There are now 81 studios across Australia, with 10 company-owned and 71 franchised. There’s also a studio in Jakarta and 12 studios in China.
Like all businesses in the fitness sector, the pandemic significantly disrupted KX Pilates operations and growth plans, forcing studios in its busiest locations to close their doors.
But Smith says his chief executive quickly pivoted the business online, allowing him to focus on expanding the business in China.
When disaster drives focus
Smith remembers the moment when the Australian government announced that all fitness studios would be required to close due to the pandemic in March last year.
“Since KX’s inception in 2010, we had only ever shut a KX Pilates studio door for half a day for a studio refurb,” Smith tells SmartCompany Plus.
In response to the public health restrictions, KX Pilates immediately devised a survival strategy to ‘stay afloat, stay relevant, stay connected’.
As part of the strategy, the business launched KX@Home online to offer mat and reformer classes, the latter requiring special equipment. The classes included group sessions of up to 20 people guided by two trainers: one to demonstrate and another to instruct.
“I’m very fortunate to have an amazing chief executive in Selina Bridge, and she has been instrumental in steering the ship while I have focused more on international growth,” Smith says.
Selina Bridge joined KX Pilates as chief executive in 2018, after a successful stint in fitness franchising as general manager of Curves Australasia.
Smith says being able to rely on Bridge to lead the businesses through the pandemic allowed him to double down on international growth plans.
“It was a blessing when COVID hit because when all the studios were closed we could get our focus over to China and help them set up,” Smith says.
In 2019, KX Pilates struck a joint-venture partnership with Chinese businessman Tony Xu. Xu has already opened 12 studios in China and has ambitious plans to open 1000 by breaking into the postnatal wellness market.
Smith says the joint-venture model — where he holds a 49% stake and Xu owns the rest — works well in a market like China’s.
“It’s a very different world, which is why we decided the joint-venture model was the way to go,” Smith says.
KX Pilates’ Chinese studios are built on different models, including a standalone studio model; a ‘shop-in-shop’ model, which is basically a studio within a gym; and the postnatal centre studios.
Smith sees “huge potential” in the postnatal centre sector. There are about 2500 postnatal centres across China where often middle-class women stay for between four and 12 weeks after they give birth.
Smith says the pandemic has allowed him to focus on what expanding into those centres would look like, pursue partnerships in New Zealand and Singapore, and prepare to launch a new reformer machine.
“Nothing is signed on the dotted line yet but we would hope to see our first studio in New Zealand this financial year and even potentially Singapore,” he says.
The exclusive Balanced Body KXformer machine, set to be released early 2022, has cost Smith $250,000 and four years to make.
“Having this machine means we can’t just be copied, which is helpful. Like many successful brands we have copycats who take what we’re doing and try to make it their own,” he says.
‘Innovate from within’
Smith’s bold vision for the future of KX Pilates is underpinned by a strong understanding of his character and his past successes and failures.
He experienced his biggest lesson after overextending the business in areas outside of its core Pilates offering. In 2015, KX Pilates had launched four additional brands, including ballet barre, yoga, cycling and a retreats business.
“I’ve got an entrepreneurial flair in my personality. I love following shiny new things and I can get really bored in the mundane day-to-day of running the business,” Smith says.
While all of those businesses were successful in their own right, Smith says the core KX Pilates brand began to grow five-fold and he began to lose focus.
It wasn’t until he went to the US and attended the International Franchise Expo that he realised he was on the wrong track. An American franchisor told Smith that the secret to the success of his 2500-strong network of hair salons was that he didn’t innovate outside the core offering, which was hair cuts.
“That was a big eye opener for me. I basically came back from that conference, de-badged all of our other brands and sold them off,” he says.
Smith says that single piece of advice has provided him with the biggest learning curve of his career and he has since “learnt to innovate from within”.
This approach has led KX Pilates to build training courses, an apparel business, and build its exclusive reformer.
But Smith admits he lost time and money creating the ballet barre, yoga and cycling ventures.
“It’s one of those things where I don’t regret it but I also sometimes question, ‘where would the business be if I didn’t lose those two years?’” he says.
Always improving
KX Pilates has come a long way since it was ranked 36 in SmartCompany’s Smart50 Awards three years ago.
Back in 2018, the network was made up of 50 studios, which means it has opened an average of 10 new studios a year since then.
Smith says the process of entering business awards helped him to reflect on where the business had come from and what it had achieved.
“It allowed us to step back and look at the bigger picture, re-evaluate our purpose and hone back in on our strategy,” he says.
Having a commitment to continuous improvement has been integral to Smith’s development as an entrepreneur.
As a science graduate and former personal trainer, Smith had no formal business education prior to starting KX Pilates.
But he threw himself into entrepreneur groups, becoming a member of the young entrepreneurs group Entourage in 2010 before signing up to the Entrepreneurs Organisation (EO) in 2014.
“Every single thing that I learnt, I implemented and if it didn’t work, I threw it out; if it did, fantastic.”
