1/14/13
My training today:
Warm-up; Stretch bands, Indian Clubs, and joint mobility Leg ups and wheel roll outs 4 set each
Deadlifts: 12 sets of 2 reps
Kettlebell floor press. 28, 32kg 5 sets of 5
Dumbell rowing 75# 5 x 5
Paul Dick Floor press:
Rowing 2000 meters.
2013 may not be a great year for the Chain fitness business.
Based on what I have read in the latest Club industry paper,
things are not looking great for this year’s business. There are a number of
things what insulated the fitness business during past recessions, but this one
is on steroids. Like always there are a few issues with their business model
and the changes that are taking place in the market cause may prolonged
recession and market dynamics. Here are some of the issues:
1. The recession is still in our faces and the unemployment
is not 7.7% ,which is a deceptive number and should be somewhere around 12% and
not decreasing, as insufficient new jobs are not being created. This is now
hitting all business across the nation as this recession is going on for years
now. You can’t ride this one out.
2. The economy has hit the middle class the hardest, who
were the largest customers of chain health clubs. With less disposable income
they can no longer afford even the bargain basement clubs at 10 dollars per
month. The middle class will take years to come back to the mid 2000 year’s
wealth….if ever.
3. 75,000 dollars a month is not uncommon for a large chain
club overhead, with fees, equipment and rent, employees etc. to ever break even
at 10 dollars per client, you will have a low margin. Therefore the 10 per
month club is not a great investment in a tight job market as you need more
bodies to keep the lights on.
4. Private equity business have normally picked up a few of
these chains like Planet Fitness, and now rejecting clubs like 24 hrs Fitness
as not a great investment. Equity firms will buy any business, even low
performers as long as they can cut the fat and eat the steak. Once you are
taken over by Equity Corporation, you’re a pawn for a few high end Harvard MBA
types, who just want to make money and could give a rat’s ass about what you
are doing. In their defense, they save
some of the business from total bankruptcy, after they make the appropriate
business positive corrections.
5. The Obesity problem is not going away and getting worse.
Most people unfairly blame the fitness business for not altering the problem. The chain fitness finally realizes they have a
problem as they don’t have a good program or message. They are doomed as you need a well qualified
staff to monitor and program the clients instead of just handing out towels and
fucked up energy drinks. That requires more overhead for trained staff, and
increased employees they can’t afford now.
6. Speaking of message. One of the upper management people
of a major chain was upset, when their New Years promotion resembled soft porn.
The employee said”our fitness business is a fraud and all about fashion.” That
person is not unemployed there anymore. You see it on TV every so often, highly
fit models that probably never train in those gyms and have personal trainers
to keep them ripped. Fraud; maybe, but surely deceptive.
7. The big chains are finding that their business of relying
on client volume year after year is no longer working, especially when you have
to drop your prices to 10 dollars and still make a profit. Some of the HVLP
chains will still be out there, but if they
over expand in a poor economy, they too will have rough time as the
recession shows no sign of going away for years.
8. The dirty little secret out today in the fitness business,
is that the small box, Micro crossfit or private strength gyms, which has a low
client volume and much higher fees is making money and growing. Then there is
the specially gyms like MMA ,Kickboxing, Yoga, and personal training clubs are
doing well also as they cater to the more serious client that will demand
results and want to be surrounded by like individuals. Its not uncommon to pay
200 to 500 dollars a month but at those prices YOU WILL get what you pay for
and the pressure is on the client as well as the owner to get fit as well as
looking good.
9. with all the mergers, consolations, equity buy outs, the
fitness business can never hope to sort itself out as a solid business model to
help the public. It’s really the fickle consumer that is at fault as they are
always looking for a quick fix, without too much effort. In fitness that is not
going to happen.
10. The Chain fitness
business is driven by the people they should reject. I know of one Crossfit
gym, that if you want to train there, you sign a paper stating that you will
make improvements and train has hard as everyone else or you will be terminated
and your money is no good. There idea is that you are not going to make their
club look bad by not getting some results.
The mission is sacred
Ken
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