Busy Body CA buys All About Fitness, becomes largest U.S. retailer

Fitness Holdings International, dba Busy Body Home Fitness, has acquired most of Colorado-based All About Fitness and, with that, leapfrogged to the top of the specialty fitness retailer list to become the largest of them all with 53 stores.

The acquisition of All About Fitness’ nine locations in Colorado, Nevada and Arizona, announced to that chain’s staff on April 29 and to its vendors April 30, has more than doubled the size of the Busy Body empire in about six months.

In early October, FHI purchased the 17 West Coast stores owned by Omni Fitness (a Life Fitness company), and in mid-November the company purchased nine Hoist Fitness-owned Fitness Warehouse stores in the San Diego, Calif., area. With various realignments and a few openings and closings, the company was at 44 before this deal. At 53, it now has three more than previous largest, Midwest-focused retailer The Fitness Experience, which is down from 55 to 50 in the last few months.

“As we’ve always said, our goal is to be the dominant player on the West Coast,” FHI President and COO Kenton Van Harten told SNEWS®, “and this acquisition fits nicely. All About Fitness is a good company, with good people, and good locations. And it has a good reputation in the industry.”

Not as if All About Fitness (AAF), run by current partners Chip Hunnings and Bill Wagner and begun in 1991 by Hunnings and Larry Domingo, was looking to be bought. Both Van Harten and Hunnings told SNEWS that it took a lot of “courting” phone calls by Van Harten to AAF (www.aafitness.net) starting back in February to get the team there to consider an acquisition.

“We haven’t gotten where we are by taking ‘no’ for an answer,” Van Harten said with a laugh, but also pointing out that it wasn’t about arm-twisting, but rather about negotiating a deal in which all parties felt they got what they needed.

Hunnings said he initially said “no,” since neither he (at 42) nor Wagner (at 43) had even considered selling for about another 10 years.

“We had created something that gave us the freedom to do what we want to do, and we weren’t interested in doing anything else now,” Hunnings told SNEWS. But, he added, after talking with FHI for a few weeks, he said he got a good feeling about how it would treat the company and its employees. In addition, Hunnings and Wagner negotiated to keep the two Kansas City-area stores (partly co-owned by Mike Mays, who manages the operations there), as well as to continue to use the AAF name for its commercial business. FHI, which is owned by investmenet fund Hancock Park Associates, doesn’t sell commercially.

Hunnings said they will focus on the commercial segment and look to grow it, as well as look to do more in the Kansas market, which is now dominated by AAF, Billie Salum’s Fitness Gallery, and Fitness Showcase.

“We think Kansas is a good place to grow in the industry,” Hunnings said. Meanwhile, the deal puts them, as he put it, “in a dream-come-true situation.”

Although the two parties have announced the agreement — details of which are confidential — it won’t actually close until late May, Hunnings said. But he felt that rumors would start in the industry, and he didn’t want his staff or vendors to be kept in the dark or for false information to spread.

Not as if this is the end of the acquisition road for FHI. Van Harten said he expected the company to be closer to 60 stores “by the busy season.” That growth, however, won’t happen randomly or by taking risks, he added. Based in Southern California, Busy Body (www.busybody.com) is run by Fitness Holdings International with Brian McDermott as chairman. McDermott and Van Harten are also partners in Hancock Park. FHI had purchased 16 of the former Busy Body stores in the former chain’s 2001 bankruptcy — as well as the rights to the name in the Western region. Van Harten said the company is well aware of the mistakes made by the former Busy Body, and that won’t happen to FHI.

“We’re not going to overpay or take unnecessary risks,” he said. “We’re not going to make those mistakes. We’re investors, and our goal is to create a good, strong, profitable chain.”

SNEWS® View: Let’s see, hitting 60 in the fall would mean about seven new stores, give or take a few as the company works through a few openings and closings related to duplication or overlap. What is FHI missing? Oregon, for one, and a few other areas on the eastern side of the Western region, which would translate into, ummm, Utah. We also wouldn’t be surprised if it made bigger strides in Arizona and worked toward some expansion on its own in Nevada, since All About Fitness was already working on that area after opening its first store there late last year. This deal continues regional locks in specialty retail, which a few smaller owners have said is making it tougher and tougher for the small guys since they can’t necessarily get the brands they need. Although last fall we named Omni as the dominant player in the East and The Fitness Experience in the Midwest, we also see and have heard about other shiftings and rumblings that could bring additional changes in the next few months. How the market shakes out this year or by early 2005 is yet to be seen. But we’ll lay money it’s going to look a bit different.