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With the final two Phoenix-area Fitness Gallery stores shuttered and now being liquidated under Ch. 7 bankruptcy, the fitness specialty market there has turned into a game of Speed Chess — brands picking up alliances, stores moving locations, newcomers opening where old ones were, and faces changing from one company to another — all at a furious pace that can be hard to keep track of. Â
“It’s definitely going to be an aggressive market,” said Bryan Dorksen, partner with Greg Feeder in the new At Home Fitness store opening this week in Scottsdale. “And we’re pretty excited.”
Who’s on first
With the exit of Donnie Salum’s Fitness Gallery and other retail changes, three fitness long-timers wasted no time jumping into the retail fray with stores of their own. Let’s see if we can lay out the game as the players and their pieces now stand:
>> Dorksen and Feeder, former managers with All About Fitness (AAF), will open newbie At Home Fitness, on the northwest corner of 70th Street and Shea Boulevard, in a former golf discount store. They will carry Landice, SportsArt, Horizon, LifeSpan and Body-Solid. Dorksen said they plan a total of three stores within a year.
>> Jay Garfall and Eli Trujillo opened another newbie, Fitness Depot, the first week of November in a temporary location in Scottsdale and, in late November, will take over the old Busy Body Home Fitness location on the northeast corner of 70th and Shea, which was also the old Fun ‘N Fitness store and is directly east across the street from At Home Fitness. They will carry Cybex, Bodyguard, Tunturi, Universal by Lamar and “a few other surprises,” Garfall said. He also plans at least one more within a year.
>> To complete the fitness retail triad at 70th and Shea, the former All About Fitness store on the southwest corner, which became Busy Body Home Fitness when that chain acquired AAF in May, will take over retail for the area when Busy Body closes later this month the store that Fitness Depot will move into. Busy Body carries, depending on the area, Precor, Life Fitness, Vision, Pacemaster, Vectra, Keys and Hoist, among others.
>> In addition, Bob Lachniet, regional sales rep for SportsArt for the last 18 months and a former manager for the area’s Fitness Gallery stores, will open his first Fitness4Home store by early December in another Scottsdale location about 2.5 miles north from the cluster of three. He will take over both True Fitness and TuffStuff (former Fitness Gallery brands), as well as handle SportsArt, Kettler, PowerBlock, Hampton and TKO, among others.
“I think it’s going to be a tremendous location,” Lachniet said, “and it’s away from the cluster.
“It’s not that I necessarily want back into retail,” he added. “It’s just that I want to control my own destiny. It’s time to put up or shut up. I have to prove to myself I can do thisâ€¦. The opportunity is here, and I’m going to go for it.”
What’s on second
Lest we forget the others in the market who aren’t doing as much churning: Bob Cunningham, owner of Exercise Equipment of Arizona, has been selling fitness specialty in the Phoenix area for 32 years — dating back to when some current owners were still in grade school — and has watched the swirl around him ebb and flow. His store is about a half-mile away around the corner on North Scottsdale Road. He currently carries Bodyguard, Trimline, Evo by Smooth, Endurance, Diamondback, Body-Solid and Bodycraft.
“They still keep coming and going,” Cunningham said, calling the area a “zoo.” “I’ve been here forever.”
He described himself as not being a “super growth guy” who has watched the others “crash and burn” around him.
The latest crash-and-burn, of course was Donnie Salum’s remaining two Fitness Gallery stores. Salum initially filed on Oct. 8 for Ch. 11 reorganization, in which he showed an estimated debt of between $1 million and $10 million with at least $1.28 million due to True Fitness. Then, on Oct. 25, he filed for Ch. 7 liquidation. (See SNEWSÂ® story, Oct. 25, “Fitness Gallery Arizona to liquidate under Ch. 7 bankruptcy.”)
“When those guys go down, they really hurt the vendors,” Cunningham said.
Lyon Alizna, commercial sales director for TuffStuff, couldn’t agree more, pointing to the fall of Fitness Gallery which left his company hurting for more than $350,000.
“For that territory to be sour the past year and a half, it’s really cost us,” Alizna said. “It’s always been a good territory for us.” Â
I Don’t Know is on third
Although not a newbie, Busy Body Home Fitness will operate five stores in the area once it closes the one across the street from the former AAF, and Florida-based Precision Fitness has consolidated its retail business to a combination health club and retail showroom in Chandler. Previously, it had also been in the North Phoenix area in a former Fitness Source store on McDowell Road. In August, former Arizona retailer out of Colorado, Advanced Exercise Equipment, was also bought by Busy Body.
“What happened is the market has completely flipped around in a six-month period,” Dorksen said.
Others in the area are focusing on commercial sales, including Gym Source and Advantage Fitness Products.
As we reported in a March 12, 2004, SNEWSÂ® story (“Fitness retailers jumping into Arizona’s growth market”), the area is one of the hottest growth markets in the country.
Between 1990 and 2000, Arizona had a population growth of 40 percent, only second behind Nevada’s 46 percent. In absolute numbers, Arizona was the fifth-fastest growing state, coming in behind only California, Texas, Florida and Georgia. U.S. Census Bureau numbers show the Phoenix-Mesa metropolitan area has nearly 2.8 million residents, which is only a couple of ticks behind the Denver metro area’s 3 million. From 1990 to 1999 (the latest figures available), the Phoenix area was eighth in the nation based on percent change of population, and Phoenix’s growth from 1998 to 1999 was up 2.8 percent.
“A market that size with that kind of growth — and it has great consumer demographics too — could handle 20 storefronts,” said Scott Logan, SportsArt director of marketing.
Sporting goods retailers aren’t blind to the growth — or the possibilities. Sport Chalet in its latest earnings report announced it planned to enter the Arizona market. The Southern California retailer that has expanded into Northern California and the Las Vegas areas said it should open four locations in the Phoenix area in fiscal year 2005-2006.
By the end of November there will be 10 specialty storefronts with another two to three coming from some of those as soon as the first quarter of 2005, not counting sporting goods retailers such as The Sports Authority and excluding possible growth from Busy Body or others rumored to be looking into the area.
“We’re always lookig at growth,” said Kenton Van Harten, president and COO of Busy Body’s parent, FHI. “If some to-die-for location came available to us, of course we’d look at it.”
Whether there is room for those that will exist — or for othersÂ — is a matter of opinion.
“It’s going to be very crowded here, very quickly,” said Lachniet, although he said the current players and stores should do fine.
Dorksen claimed Phoenix is growing and should have no problem supporting the startups, growth and additional storefronts.
Garfall of Fitness Depot called the area “topping out,” but said he thought there was still room.
Cunningham, who’s watched the area since he began Exercise Equipment of Arizona in 1972, said everybody seems to want to open up shop there.Â Â
“I definitely think it’s getting over-saturated,” Cunningham said. “They see the growth numbers, and everybody wants to come to town.”
In a SNEWSÂ® story in March about the growth in Arizona, John Talley, then with Advanced Exercise Equipment which wasn’t yet in negotiations to sell to Busy Body, couldn’t have been more prophetic in his statement that the shakin’ had just begun in the Southwest.
Said Talley, who now reps Life Fitness: “We haven’t seen the end in Arizona.”
SNEWSÂ® View: Nor will we soon see the end of the movin’ and cruisin’ in the greater Phoenix area. Some of those jumping in have been watching for awhile as the Fitness Gallery empire crumbled, biding their time, while some just decided the stars had aligned just right and it was time to give retail a whirl. In March, we said in our SNEWSÂ® View about the scene there that “we expect some eruptions are about to begin there, and that 2004 is going to be a big one for changes all the way around.” The demographics are partly what brings the attraction — large and spacious suburban homes allow consumers to outfit entire rooms or have the space even for a couple of pieces. Meanwhile, the Ch. 7 liquidation of Fitness Gallery continues, with vendors such as True and TuffStuff trying to make good at least in part with burned consumers. We hope all of the current dealers plan their growth wisely; the Phoenix area and its vendors haveÂ been burned enough.