After L.A., the Hamptons, and Manhattan, This Trendy Boutique Gym Is Taking on One of the Most Controversial Places on Earth--Saudi Arabia

Paint fumes lingered inside the airy new studio, where my thighs were burning from the endless squats. Around me, Lululemon-clad women with bare arms and lustrous hair gripped the wooden ballet barre and assessed themselves in the mirrors, while our instructor cheered us on. "Put on your brake lights," Rihanna chanted over the sound system. "You're in the city of wonder." Outside the windowless room, this city of wonder was shining. Palm trees waved gently near the outdoor plaza, at a picturesque remove from midafternoon traffic. Fountains gurgled next to a large Shake Shack, while the patrons at two adjacent Starbucks sat basking in the sunlight of a large patio. That is, the men basked. They were the ones allowed to occupy most of the patio, and the front Starbucks. The women, some fully veiled and all covered in flowing black abayas, were restricted to a few tables in the back corner. These women were the potential future customers of the upstairs fitness studio, where our spandex-clad bodies had moved on to pelvic thrusts. It was the inaugural friends-and-family class at the newest location of Physique 57, a 13-year-old New York City-based chain that specializes in ballet-style barre workouts and caters largely to wealthy, well-traveled women. And two of the women in this particular class, Physique 57 co-founders Jennifer Vaughan Maanavi and Tanya Becker, had traveled far indeed--from New York to Riyadh, the capital of the Kingdom of Saudi Arabia. "We've opened 13 studios, and nothing is more exciting than this moment," Maanavi, a former banker with a quick laugh and a quiet steeliness, said the next evening, at a lavish launch party for the new studio. "I have wanted to be in Riyadh for so long." Yet the culmination of her ambition--one that involved partnering with one of her Saudi customers and waiting years for the government to allow women to work out in licensed gyms--came at an awkward time. Maanavi, Physique 57's CEO, and Becker, its chief creative officer, had already spent months dealing with the mundane and not-so-mundane headaches of expanding into a distant and relatively unknown market with fast-changing regulations. Female-only gyms, where women can strip down to spandex and more sweat-appropriate gear, weren't fully legal until 2017. Suddenly, for most Western businesses, talking about Saudi Arabia was PR kryptonite. Yet the country and its money remain deeply embedded in American businesses, from oil companies and financial giants to Hollywood conglomerates and Silicon Valley unicorns. Saudi Arabia imported $25.5 billion in U.S. goods and services in 2017, including $2.6 billion worth of cars from the likes of Ford and GM. Meanwhile, between its own direct investments and the $45 billion it's contributed to SoftBank's tech-focused Vision Fund, the Saudi sovereign wealth fund is one of the biggest backers of Uber, WeWork, Slack, and many other high-profile U.S. startups. Saudi Arabia's population of 33 million hits the consumer trifecta of young, wealthy, and tech-savvy. Almost 70 percent of the population is under the age of 30, with a heavy reliance on Snapchat, Instagram, Uber, and other local and Western apps. The country's average GDP per capita is an oil-juiced $55,000 by purchasing-power parity. But with global oil demand expected to eventually reach its peak and a high Saudi unemployment rate, bin Salman is trying to make Saudi Arabia less dependent on fossil fuel revenue and to create new types of jobs for his citizens. His Vision 2030 economic and social reforms have included finally allowing women to drive, as of June 2018; reopening movie theaters; and hosting WWE matches and other Western sports events, along with pop-music concerts by the Black Eyed Peas and Mariah Carey. Now, many beloved U.S. consumer brands--Shake Shack! Apple! Nike! Coach!--have opened outposts in Riyadh or the more liberal, coastal city of Jeddah. Physique 57 is following in the fitness footsteps of Curves, Gold's Gym, and CrossFit, while Starbucks has 166 stores in the country. AMC Theatres has announced plans to open up to 100 new cinemas there by 2030, while Netflix is making concessions to keep Saudis watching its content at home. "There are some really, really key advantages for American businesses in Saudi Arabia right now, despite all the risks," says Emily Hawthorne, a Middle East analyst with geopolitical consulting firm Stratfor. But for all of these American companies, doing business in Saudi Arabia means celebrating the crown prince's reforms while staying silent about the devastating, U.S.-backed war in Yemen; the jailing and reported torture of women activists who fought for the right to drive; and a draconian "male guardianship" system that prevents Saudi women from attending university, traveling, marrying, or doing practically much else without the permission of a father, husband, brother, or son. In recent months, Saudi women fleeing their families have drawn new attention to these restrictions, heightening the reputational calculus for businesses that decide to expand into Saudi Arabia. Which includes Physique 57, a luxury brand with a celebrity following, an empower-women mantra, and a cosmopolitan list of franchises in Dubai, Bangkok, and Mumbai. In March 2018, when Maanavi and Becker committed to Riyadh, the social change sweeping the country seemed full of promise. That's changed, brutally, in recent months. So as Physique 57's founders continued with their expansion plans this fall, the way in which they discussed--and carefully dismissed--Saudi Arabia's darkening global reputation illuminates how complicated it can be to bring your business there. "I'm not political," says Maanavi. "Whatever is happening with them politically, it must remain separate from our mission to help empower women." But can any company today really separate its mission from politics? "This is crazy, this is crazy, this is crazy!" Weeks earlier, in Physique 57's Wall Street co-working space, Maanavi is laughing about some of the wackier problems she and Becker have confronted in their quest to open a Riyadh licensee. It happens to be October 2--the day that, in Istanbul, Khashoggi walks into the Saudi consulate for the last time. It will take a few days for the drumbeat of awful headlines to start. At this point, Maanavi and Becker and their Saudi partners seem to have already navigated plenty of challenges, including: recruiting experienced dancers and fitness instructors who want to work in Riyadh, when, as Physique 57 head of global training Antonietta Vicario puts it, "young dancers want to go to New York, not Saudi Arabia"; getting them visas for multiple countries; and finding a country to which Physique 57's "master trainers" can regularly travel to get the new hires up to speed. "Really, nothing's worked out, except that we will get there. We. Will. Get. There," Maanavi chants in October. Once more: "We will get there." Physique 57 co-founders Jennifer Vaughan Maanavi (left) and Tanya Becker in an SUV on their first trip to Riyadh, Saudi Arabia, where their New York City-based barre chain debuted in November.CREDIT: Iman Al-Dabbagh It's exactly the sort of determination that started her company, and ultimately wooed her co-founder. In 2005, with a young child and working long hours at Morgan Stanley, Maanavi wanted a more flexible schedule. Then, her favorite fitness studio--the Lotte Berk Method Studio, an Upper East Side mecca for devotees of the O.G. barre workout--closed. Maanavi, a Columbia MBA who reads the Harvard Business Review for fun, saw an opening to start her own thing. But she had her heart set on doing it with Tanya Becker, one of Lotte Berk's top instructors. And Becker, at first, wanted nothing to do with her. "This woman is just another crazy client from the Upper East Side," Becker thought, after hanging up on Maanavi's first cold call. And her second. And her third. That should have been the end of it. Becker, a dancer and choreographer with a riot of tawny hair, was in Michigan, ensconced in another barre-related project. Undaunted, Maanavi flew out, uninvited, from New York, and finally persuaded Becker to meet her in a strip mall to hear her out. It turned out, says Becker, "we had the same vision. We wanted to bring this to as many women as possible around the world." Maanavi had already lined up a payment processor, studio space in New York, and a line of credit (Physique 57 remains bootstrapped to this day, funded by some debt but no outside investors). Becker got to work developing the company's proprietary variation on barre, a ballet-style workout inspired by Berk, a German dancer. It includes cardio and strength training, and it relies on plenty of tiny, often-excruciating repetitions ("Bend your knees! Lift your heels! And pulse!" to exhaust your muscles and, ideally, give you a lithe, dancer's physique. Thirteen years in, the co-founders, both 47, seem to have developed an ideal partnership. Maanavi's jet-black hair, porcelain skin, and sharper conversational style balances Becker's tan, laid-back, more bohemian flair. Becker at one point praises both her co-founder and her spouse by saying she wound up marrying someone just like Maanavi: "I met Jennifer and I thought, 'I really want the male version of her in a husband.' She has really good morals and values." Their company has more than 130 U.S. employees, annual revenue well above $10 million, and a celebrity clientele that includes Chrissy Teigen, Sarah Jessica Parker, Kelly Ripa, and Hilaria Baldwin. It also has a fairly random assortment of locations: corporate-owned studios in Manhattan, the Hamptons, and Los Angeles, along with licensed outposts in Dubai, Bangkok, Mumbai, Manila--and, now, Riyadh. Maanavi says their strategy has been to go to cities where women are willing to spend the equivalent of $30 or more per class. "Dubai is basically one big 10021," she jokes, referring to the well-heeled Upper East Side ZIP code. But, more crucially, she's gone where potential licensing partners take on the work of vetting new markets. For the past several years, Maanavi's sorted through an average of 10 pitches per month, mostly from women not unlike herself: They become passionate customers, happen to have deep pockets, and want to bring Physique 57 to a wealthy market where it can establish one of the country's first barre studios. Another requirement is that classes must be able to be taught in English, to simplify teacher training and quality control. (So Mauritius and Tokyo haven't made the cut; London should, despite existing barre competitors, but Maanavi hasn't found the right partner yet. Istanbul almost did, until "political issues" and election-related protests spooked Physique 57's potential partner there.) "This issue with Saudi Arabia was big, but there weren't riots, for good or bad," Maanavi says. "It's been more business as usual." During Physique 57's launch party in Riyadh, Becker leads a barre class that includes expats and Saudi women, most of whom didn't want to be photographed out of their abayas.CREDIT: Iman Al-Dabbagh It's a passive-seeming expansion strategy, and one that's left Physique 57 playing catch-up at home to a slew of well-established U.S. competitors, including Exhale, Bar Method, Barre3, and Pure Barre. But Maanavi defends her emphasis on international expansion over domestic as giving her access to cities where she can create the market. She also claims that her experiences working with international partners have gotten her ready to franchise, by teaching her and Becker how to promote (and preserve) their brand and method in some very diverse markets. Physique 57 plans to open locations this year throughout the Northeast, including Philadelphia and Washington, D.C., and, eventually, in Texas. Meanwhile, Maanavi is in talks with a global franchising company about expanding into other Middle Eastern markets. Still: "Riyadh? Really? Not London or Paris?" That's how Maryam Fattahi Salaam, who runs Physique 57's two Dubai studios, says some of her clients have reacted to the company's expansion into neighboring Saudi Arabia. Which echoed many of my own questions: In the whole wide world, why expand into a country that ranks 92nd on the World Bank's list of economies for "ease of doing business"? One where the consumer market is appealing, but the restrictions on foreign businesses and the red tape around unwritten laws is daunting? One where women might finally be able to drive--but where they still need a male guardian's permission to marry, attend a university, or travel? Given all of that, why bother with jumping through all the hoops required to enter Saudi Arabia? "Our going over there should not be looked at as an endorsement of how the country is run."Jennifer Vaughan Maanavi The demand was seemingly there: Ever since Fattahi Salaam opened her first Dubai studio, in 2013, Physique 57 has been fielding interest from potential Saudi partners. Saudi women regularly travel to the United Arab Emirates for work or for vacation. Often, when they return home, they keep up with Physique 57 or other workouts via online classes, in the safety and privacy of their own homes. Maanavi and Becker say they saw it as an opportunity to fight obesity, which affects almost 40 percent of Saudi women, and be a part of the social change: "Offering more exercise to the women of Saudi Arabia is a simple idea with tremendous impact," as Maanavi puts it. More practically, though, they wouldn't be risking their own money--and they wouldn't be jumping through the hoops alone. "It was beautiful. It was amazing. It was unexpected," raves Aljohara Fahad bin Zarah, the Saudi woman who is bringing Physique 57 to Riyadh, of her first time taking a class. Now 29, bin Zarah is a petite, direct woman who's a big Sheryl Sandberg fan: "I love that there are a lot of women doing things" in Saudi Arabia, she says. "And I hope people lean in more." Five years ago, bin Zarah was working in finance in Dubai, struggling with a knee injury and other chronic health problems, when she stumbled across one of Physique 57's studios there. After her first class, "my knee did not hurt me, my hip did not hurt me, my back did not hurt me," she recalls. "I kept coming back, and my body has changed in ways that I could never ask for." Soon, bin Zarah sent an emotional email to Maanavi and Becker, thanking them for helping to transform her relationship with her body. They stayed in touch as bin Zarah returned to Riyadh, where she kept up with Physique 57 through its on-demand online classes. And then she married exactly the right person: Nasser Ibrahim Al-Agil, a Syracuse University-educated entrepreneur and fellow fitness devotee who was born into one of the wealthiest Saudi families, the Al-Agils, who founded mega-bookstore Jarir. But Nasser, a CrossFit enthusiast, wanted to start his own company. "We're the second generation," he says. In 2015, he established the fitness-management company now known as Alirco, and started opening gyms. His company now operates CrossFit affiliates and has created its own cycling studio called, yep, SoCycle. Nasser doesn't take Physique 57 classes--and he couldn't in Saudi Arabia, where women can remove their cloak-like abayas among other women or relatives, but must remain fully covered in mixed-gender public spaces. Female-only gyms, where women can strip down to spandex and more sweat-appropriate gear, weren't really legal until 2017, meaning that most Saudi women could play sports or work out only at private schools, diplomatic compounds, and some spas. Then, as part of Vision 2030, the government in 2017 officially began licensing women-only gyms, kicking off a gold rush in Saudi Arabia. Homegrown studios and international chains alike have seen a sudden influx of demand and entrepreneurial activity. Saudi women are creating women-only running clubs, boxing studios, and boutique boot camps. They're flocking to local chains like Fitness Time and NuYu, and are beginning to explore the women-only locations of international imports. "It really matters who your partner is--especially in Saudi Arabia, where these rules are in the midst of changing," says Stratfor analyst Hawthorne. "They're changing the visa laws, the tax structures, the fees businesses have to pay for expat workers. You have to trust that your in-country partner is able to navigate the changing rules." When it appeared that women-only gyms would become fully authorized, bin Zarah convinced her husband that a Physique 57 license would be a smart investment. The young couple pitched Maanavi and Becker, who were particularly impressed with Aljohara's passion and Nasser's expertise. They signed a contract in March 2018, the same month that Mohammed bin Salman appeared on 60 Minutes and toured the United States, meeting with Jeff Bezos and Bill Gates. Now bin Zarah runs the new studio for her husband's company, which is planning to eventually build more Physique 57 locations around the country. Under the terms of the deal, which is similar to a franchising arrangement, Alirco put up the costs of opening the studio and will pay Physique 57 a cut of revenue. Maanavi and Becker, in exchange, helped to recruit and hire teachers, and sent their employees to train the women who will be working in Saudi Arabia. In November, the co-founders went to Riyadh for the first time to advise Aljohara and Nasser on everything from teacher technique to studio design, and for the studio's soft launch. After taking classes at one of Physique 57's Dubai locations, Aljohara Fahad bin Zarah persuaded the chain's owners to let her and her husband--who was born into one of the wealthiest families in Saudi Arabia--open outposts in Riyadh.CREDIT: Iman Al-Dabbagh Up until then, opening the Riyadh studio had involved "a lot of 90-second freak-outs," recall Becker and Maanavi. Take recruiting and hiring experienced teachers. That's always the most difficult part of international expansion, Maanavi says, but it's especially complex in a gender-segregated religious autocracy. Unlike neighboring Dubai, which has cultivated expat-friendly enclaves to attract Western white-collar workers, Saudi Arabia does not allow even expats to drink, buy bacon, or wear whatever they want in public. (While some women now walk about with their hair uncovered, many I saw in Riyadh remain fully veiled, with only their eyes and shoes visible.) There have been plenty of other, if more common, problems. Physique 57 eventually hired four women to teach classes at the Riyadh studio, one of whom dropped out before training started. The three remaining teachers, two Filipinas and an Egyptian, were initially supposed to train in New York, but they couldn't get visas in time. By January, another teacher quit, when her husband's job moved to Jeddah. Then there are the country-specific headaches: Only women are allowed to work inside the Riyadh studio when women are taking classes--meaning that as bin Zarah tried to fix the sound system and lighting in the days before the planned launch, she couldn't bring in workmen during normal hours. There are marketing challenges, too: In a country that, last April, shut down a gym for posting a video on social media of a female instructor in workout clothes, how do you brag about your business on Instagram? "We do everything by the rules," bin Zarah says. "I'll always be respectful and conservative. I'll do my best not to put up an image that disrespects my country, my community, or even the brand itself." So the Physique 57 Saudi Instagram account focuses on mostly English-language text about results and classes; photos or videos of the Filipina teachers in fairly conservative workout attire; or professional models. What you won't see there: snaps from the studio's lavish launch party in November, catered by a high-end wedding planner and attended by women with their abayas open and headscarfs off. Bin Zarah presided over the event in a striking white abaya and hijab, while Becker wore a one-shoulder shimmery jumpsuit. A team of female Filipina caterers circulated with endless platters of stuffed grape leaves, chocolate-pistachio pastries, and small goblets of jewel-bright fruit juice. (Roughly a third of the country's population is made up of foreign workers, including white-collar expats and service-industry employees, many of whom hail from South Asia and the Philippines.) After the founders gave their speeches--"Today we are in the studio, today we are driving," bin Zarah proclaimed, "and the best is yet to come"--a handful of Saudi women and expats followed Becker into one of the mirrored workout rooms. Others hung back, chatting about their jobs and children and plans to go see an Egyptian movie at one of the cinemas that opened in the past year. Saudi Arabia's population of 33 million hits the consumer trifecta of young, wealthy, and tech-savvy. One Saudi attendee, who works at an energy-software company and said her workout routine involves yoga and high-intensity interval training, swapped her tight head­scarf and loose abaya for sweatpants, a T-shirt, and a bandanna. An hour later, she spilled out of her first Physique 57 class glowing and a little sweaty. "It was amazing," she exulted. "I definitely think I'm going to sign up." The evening before we flew into Riyadh, Becker was worrying about her speech at the launch party. "Can we even talk about empowering women?" Could they use language that, especially at that tense time, might come across as overtly political? It's a tricky balance for any company going into Saudi Arabia, where social change is both real and halting. Some stores, like the Starbucks below the new Physique 57, kick out patrons at prayer times and continue to enforce strict gender segregation. (The coffee company drew inter­national criticism in 2016 when an internal wall dividing the sexes at a Riyadh Starbucks fell down, and the location banned women temporarily rather than allow them to use the men's entrance.) "As cultural attitudes and public policy evolve over time, we regularly review our own policies to ensure our stores are inclusive, welcoming places for all," a Starbucks spokesperson says by email. But other restaurants, like a chic sushi joint not far from the studio, seat women and men at neighboring tables. A group of women I met picnicking in Riyadh's historic Al Bujairi district let their headscarfs slip as they discussed their professional ambitions, as doctors and mathematicians and events coordinators; then they reattached their face veils to walk about in public, masked, anonymous. So for a company like Physique 57, run by two women who employ and serve a mostly female clientele, entering a partnership orchestrated by a Saudi business­woman is thrilling. So is the chance to help women take control of their bodies in an environment that has long policed almost every aspect of women's behavior and appearance. As long as it doesn't come across as a political act--as ­perceived either by Saudis on their turf, or by Physique 57 customers or staff who disagree with the company's expansion there. "If there's a business going into a country, it doesn't have to be political," says Maanavi, who could be blunt and even casual about the horrors of Khashoggi's death. The gruesome details "have not helped," she admitted in mid-October. "For sure, I will not be able to find an American [employee] to go over there." Yet she maintains a deliberately narrow view of her company's presence and purpose in Saudi Arabia. "Our going over there should not be looked at as an endorsement of how the country is run." Rubeen Plaza in downtown Riyadh, where Physique 57 joins other American imports, including Starbucks and Shake Shack. CREDIT: Iman Al-Dabbagh Some business ethics experts point out that ignoring politics is unrealistic for businesses anywhere these days, when divisive issues such as immigration policy and U.S. gun violence have led companies including Microsoft and Dick's Sporting Goods to make decisions inevitably perceived to be partisan. "I don't think it's possible to not be political," says John Wilson, head of corporate governance and research at Cornerstone Capital Group. "There are plenty of places in the world to open a fitness center. That is an inherently political act, and personally I would not recommend shrinking from that." Others go further, arguing that doing business with Saudi women should also mean advocating for improvements to their situation, like an end to the male-guardianship system. "We're not against businesses going to Saudi Arabia," says Rothna Begum, a senior researcher for women's rights at Human Rights Watch. "But we would like to see them helping champion further reforms." However, avoiding overtly political discourse seems to have worked out for many larger U.S. companies already doing business there. By January, despite the wave of CEOs verbally distancing themselves from Saudi Arabia in the wake of Khashoggi's killing and canceling planned appearances at a financial conference organized by the crown prince, very few companies had actually cut any sort of meaningful ties. Skipping the October conference in Riyadh did not mean his company would "run away" from Saudi Arabia, BlackRock CEO Larry Fink later said. SoftBank continues to invest its Saudi money in tech startups, and Netflix, in late December, bowed to Saudi censors and pulled an episode of standup by Muslim comedian Hasan Minhaj for criticizing Mohammed bin Salman. Few of these companies seem to be feeling any financial fallout from these decisions, despite some negative headlines. Netflix is signing up millions of new customers every month. Businesses including SoftBank have said they're paying attention to U.S. government policy toward Saudi Arabia, but major changes seem unlikely so far. A U.S. Senate resolution in December condemned Khashoggi's death, but the Trump administration has stood by MBS and the financial and strategic ties between the United States and Saudi Arabia. Maanavi, meanwhile, claims she hasn't yet lost customers or instructors because of her decision to go to Riyadh. And she's taking the long view of the payoff: "Year one could be slow," she predicts before her first trip there. "But we're there early--and I think five years from now, we're really going to be happy." Maanavi is filing her nails in the back of an Alirco-provided SUV en route to the airport, Riyadh's blue skies and impressive skyscrapers and desert shimmering in the distance. It will be a few more months before Physique 57 starts to see any results from its Saudi Arabia bet. After the founders' visit, Alirco delayed the studio's official opening. Then they lost a teacher, and then it was the end-of-year holiday season. In mid-January, it finally opened. So far, Maanavi and Becker say they are pleased with the early signals. There have been a number of mother-and-daughter pairs signing up in Riyadh, an unusually high number of walk-ins for a boutique fitness studio, and a promising early retention rate: So far, 75 percent of the Saudi women who have tried a class have come back for another. Consumer patterns are only one part of their future equation there. How Physique 57 and other U.S. businesses in Saudi Arabia might fare will always contain a large degree of uncertainty. "Companies are faced with particular challenges whenever they're dealing with countries that are under totalitarian regimes, because they're a bit more mercurial," warns Don Heider, head of the Markkula Center for Applied Ethics at Santa Clara University. Plus, with social media, he says, "the speed at which information travels, and your reputation can be damaged, has increased exponentially." But Maanavi and Becker, who signed a 10-year contract with Alirco, are comfortable with their gamble. "We've been working on this for four years," Maanavi says. "You read about companies with 20-person boards and 100 locations and complicated tech. This is just me and Tanya, drinking green juice, saying, 'Wanna go to Riyadh?'"

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