XpresSpa Pivots Back From Covid Testing With A More Balanced Retail Vision

XpresSpa Group, has launched a suite of new products for women that are primarily sourced from women-owned companies as the company moves in a more broad-based direction now that the Covid crisis appears to have abated.

During the pandemic, under former CEO Doug Satzman, the airport spa retailer shifted its focus to Covid testing after it had to close at least half of its more than 50 airport locations and sales were tanking. The closures triggered a share fall to just $0.48 in mid-March 2020 but the strategy shift to testing led to a revival to over $7 by the end of May.

Under the XpresCheck brand, XpresSpa opened specialist Covid screening and testing centers at a number of airports in the following months including New York JFK, Newark Liberty, Boston Logan, Denver International, Dulles International, Houston George Bush, Phoenix Sky Harbor, Reagan National, and Salt Lake City.

While the move made sense, some observers said the rollout was too slow and did not bring in the revenue the company needed, with losses rising. By January 2021, the stock has fallen to $1.20, ending the year at $2. In January 2022, following Satzman’s resignation, the company’s COO Scott Milford took the helm. He has previously held human resources roles at Bayada Home Health Care, Le Pain Quotidien and Town Sports International before that.

This year there has been a rethink under his leadership, though XpresSpa maintains its commitment to health testing and bio-surveillance monitoring in its airport locations to identify existing and new SARS-CoV-2 variants.

Focus on women’s health

A women’s health initiative was launched as part of an overarching social responsibility platform strategy designed to advance the education and support of wellness for women. The company has also rolled out an expanded line of retail products dedicated to women’s health including lines in the health and personal hygiene, pregnancy prevention, reproductive health, first aid and wellness categories.

Milford commented: “Women play a significant role shaping the trends we see in the wellness industry. We want to deliver solutions that inform and serve their lifestyles and meet their specific health and wellness needs. We have been very intentional in sourcing sustainable products from companies that support women and are owned by women and people of color.”

Though the health angle has been prioritized, for example, health screenings, contraceptives, STD testing and pregnancy testing, some beauty lines are also in the mix, bringing the company back to its initial—and successful—spa platform.

Spa services are back, at a cost

So is the spa business on a rebound? Milford told Forbes.com: “Wellness services focusing on relaxation and self-care remain core to XpresSpa across locations. The group is evolving by continuing to add new or enhanced services. For example, the newly renovated XpresSpa located at JFK’s Terminal 4 near Gate B22, meets the needs of a new era of post-pandemic travelers—health-conscious but seeking more self-care solutions and amenities.”

In other words, traditional wellness services, such as neck and back massage, are back. And alongside have come state-of-the-art solutions incorporating technology that gives therapeutic relief with minimal intervention.

Also said to be performing well is the Treat brand, a new service this year focused on providing both on-demand health and wellness services to travelers. So far two locations are open; at JFK Terminal 4 and Phoenix Sky Harbor, with a third unit set for October in Salt Lake City Airport.

Treat is designed for travelers seeking a break from the chaos of travel and focus their valuable dwell time on self-care. Milford said: “Since January, we have seen steady growth in the demand for specific Treat medical services including significant growth in vitamin and hydration therapy services.”

These news services are driving more sales—but not profit as yet. Total revenue during the three months to June reached $13.6 million compared to $9.1 million in the same period in 2021. More than half of it ($7.4 million) came from XpresCheck locations, but reopened XpresSpa locations and Treat wellness centers delivered $3.7 million, a figure that should continue to grow as travel numbers continue to rise.

However the higher costs of reopening led to an operational loss of $7.8 million compared to $4.2 million in the same period in 2021. XpresSpa Group’s third quarter results will come out in mid-November.

Source: https://www.forbes.com/sites/kevinrozario/2022/09/29/xpresspa-pivots-back-from-covid-testing-with-a-more-balanced-retail-vision/