Photo: Sarah Degray, owner of REV. Photo by Kelsey Regan Crowley.
by Joyce Marcel, Vermont Business Magazine Even on the phone, Burlington's Sarah Degray, 36, sounds like she's bursting with energy. A fan of indoor cycling — also called spinning — since 2005, she turned her passion into a $1 million business. Things were going great — REV is the Small Business Administration's Vermont Woman-Owned Company of the Year— until COVID-19 took most of her growth away. Now she's struggling to keep her business open.
“I'm so proud of the hard work and growth of my business between 2012 and the beginning of 2020, but COVID-19 has proven to be a formidable adversary,” Degray said. “REV has grown to a size that is incredibly hard to sustain and maintain, given that my business model relies on a large volume of patrons cycling together indoors, multiple times per day.”
REV, by the way, is not an acronym. It's short for revolution.
It all started in 2005, when Degray was in a study-abroad program in the Netherlands.
“I ended up taking a spinning class out of being homesick and looking for some community,” Degray said. “The instruction was in Dutch, as it should have been. But I understood the music and cycling to the beat. It was this magical fusion of two of the things I really like, athletics and music.”
Indoor cycling has been around since the late-80s; it had another big moment in the 1990s.
“But it really came into focus in the last 10 years with things like SoulCycle,' Degray said.
When Degray returned to Vermont, she couldn't find a dedicated spin studio. She moved to Burlington, got a job as a legal secretary, applied to graduate school and put spinning on the back burner.
“My former career goal was to obtain a PhD and be a professor of political science or law,” she said. “I ended up going to grad school at the New School in New York City. As fate would have it, I was in an epicenter of spin classes. I was really happy.”
Degray finished her master's in political science in 2010 and moved back to Burlington to work in the Public Defender's office. Again she was disappointed; there were still no spin centers. Then she went into what she called her “quarter-life crisis.” When she came out the other end, she decided to open a spinning center of her own.
Photo: Lunge Happy at REV. Photo by Dillon Bonk.
“I could fill a void, so why wait?” she said. “I spent a full-on year of business planning and decided I was going to start a dedicated indoor cycling studio. This pursuit may have been somewhat selfish, but it's also a great thing for the community. I couldn't get a loan anywhere, so I had to 'bootstrap' this one. I had an extended member of my family loan me $25,000. In true Vermont fashion, I had to get scrappy. I rented a space and installed used bicycles from gyms that had closed. I started with 20 bikes.”
In 2012, REV began. The first year it was only open for two months, but Degray had sales revenue of $31,340. By 2019, REV was reporting $1,018,408.90 in sales revenue.
“That's the year we doubled in size and opened our field house,” Degray said.
Before COVID-19, Degray had a 45-bicycle studio that employed 28 people plus herself — fitness instructors, a studio manager and front desk staff — and had over 1,000 active clients ranging in age from 14 to 85.
All of that is gone now. Degray closed her doors on March 14, and had to lay off all but one staff member.
“We're still a staff, a family,” she said. “We're in constant communication. Just before we shut down we were serving 300 people per day. On March 5, I got the email saying we were Vermont's Woman-Owned Business of the Year. And 10 days after that we were closed. It's kind of heavy. But I'm very appreciative. We may be closed to the public, but we're running programming for people on-line. We launched an on-line subscription channel where people can get pre-recorded workout videos. It's a mere fraction of the business we were doing, but it's something.”
During the last 100 days, Degray's business has been rapidly depleting her cash reserves.
“I am now having serious conversations with my landlord to downsize, restructure, or even forfeit my location because the financial consequences are so severe,” Degray said. “I think your readers could be misled when they see we reached the $1 million dollar sales mark in 2019. They may believe that we are doing better than we are. I made significant reinvestment in my company in 2019 to build the 4,000-square-foot field house. As of mid-March 2020, I have not been able to use or profit from that investment. Instead, the business has been losing money the last 100 days and currently, sales are down 95%. A complete reinvention and reimagination of my business is required.”