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For the week of March 8-14
>> On March 14, the-company-formerly-known-as-Direct-Focus, since known as The Nautilus Group will officially become “Nautilus Inc.” Don’t expect any razzamatazz, flashy announcements or champagne toasts. The company said it just “signals the transition” from a holding company structure to a centrally managed organization, indicating it now serves multiple consumer audiences, through multiple channels and with multiple brands. Website still at www.nautilus.com.
>> A new study by the Kaiser Family Foundation sheds a very revealing light on perhaps why our nation’s youth are, as a whole, unfit and basically sedentary — too much access to computers, TV and other electronic media. The study reported that among 8- to 18-year-olds, the TV is on much of the day in the house, whether or not it is being watched. On average, nearly four hours each day is spent by this age group watching TV or videos, and an additional two hours per day is spent listening to music on an MP3 or CD player. While three out of four in the age group report they read for pleasure each day, the time amounts to an average of merely 43 minutes. On the bright side, the average time spent each day playing sports or being physically active each day is reported at one hour and 25 minutes. SNEWS® View: Assuming this is self-reported, we are a bit skeptical of that 85 minutes of daily activity based on all this lack of time and increasing fat in the younger population. One other somewhat shocking thing about the study is the mass of techno-gear in the bedroom. The study took a look inside the bedrooms of 8- to 18-year-olds (no, we’re not talking about shock that rooms require a backhoe just to clean up because that would be normal). In this age group, 20 percent have Internet access, 20 percent have premium TV channels (and we don’t think they’re watching Oxygen or Denise Austin or Body by Jake workouts), and 31 percent have a computer. So far so good. But it gets better. Get this: 37 percent have a TV with cable/or satellite hook-up, a whopping 49 percent have a video game console, more than two of three (68 percent) have a TV, and more than half (54 percent) have their own VCR/DVD player (nope, doubt we have yoga tapes in there), 84 percent have a radio and 86 percent have a CD or tape player. Heck, with that kind of techno-entertainment access as a kid, those of us at SNEWS® agree that we’d have been begging to be grounded and sent to our rooms! Not surprisingly, those kids that did not have a TV in their room were more likely to read. Maybe they’re also more likely to get out for a workout or some exercise too.
>> Look for Kevin Lamar in the Cybex booth at the IHRSA show, March 17-19. His new company — Lamar Health, Fitness & Sports — is now working with Cybex with its new “Lock ‘n Load” plate technology, which Lamar showed at Club Industry (see SNEWS® story, Oct. 21, 2004, “Club Industry ’04: What was on the floor?”). Cybex will use the rocker-switch concept, patented by Flex fitness founder Mark Nalley, on its commercial selectorized product.
>> Bally Total Fitness’ board of directors’ Compensation Committee has adopted an Inducement Plan to provide equity compensation to persuade people to become employed by the company. The plan was adopted because Bally’s 1996 Long-Term Incentive Plan may not have sufficient shares available to provide necessary equity inducement for new employees. The plan provides for the issuance of up to 600,000 shares of its common stock, and stockholder approval is not required by the New York Stock Exchange. Once a new equity incentive plan is approved by its stockholders, Bally does not intend to make any further grants under the Inducement Plan. So far, the compensation committee has approved the grant of stock option and restricted stock awards to two new employees: Marc Bassewitz, senior vice president, general counsel and secretary, was given 25,000 options and 100,000 shares of restricted stock; and David Reynolds, controller, was given 10,000 options and 10,000 shares of restricted stock.
>> A senior analyst for RBC Capital Markets has taken an extra look at Nautilus and surmised that progress looks good and earnings are on track to meet or exceed estimates, and it has reiterated its “outperform” rating. “Based on our positive outlook and the potential for future catalysts (e.g., gaining additional retail/commercial accounts and potential benefits from upcoming trials against Icon), we reiterate our outperform rating and $30 price target,” wrote Edward Aaron, vice president, equity research, RBC. Nevertheless, RBC says Nautilus (NYSE: NLS) remains an above-average investment risk. In RBC’s summary, it said it talked to or visited about 50 Nautilus retail locations and saw “good sell-through.” It also named The Sports Authority has ramping up its Nautilus inventory; however, it named specialty fitness as “difficult to generalize.” “We heard generally positive feedback on Bowflex Xtreme models, SelectTech dumbells, Schwinn products and Nautilus cardio products,” Aaron wrote for RBC. “We received mixed feedback on retail sales of TreadClimber in the specialty channel. We would expect this feedback to change over time as consumer awareness of the TreadClimber builds.” Aaron continued, “Over the next three years, we expect EPS to grow 25 percent-plus, driven by improving sales trends in the direct channel and the potential for further distribution gains in the commercial and retail channel.”
>> Recently, Iron Grip Barbell Company released the latest version of its eWeight Planner program. Version 2.2 includes the addition of FreeMotion equipment, and features new information on equipment from 15 participating fitness equipment manufacturers, including Life Fitness, Cybex, FreeMotion, Nautilus, Technogym, Paramount, Strive, Flex, Body Masters, Muscle Dynamics, Magnum, Matrix, Hoist, Power Lift and Atlantis Fitness Equipment. The newest version of the planner has been updated with input from the participating manufacturers. Iron Grip’s eWeight Planner calculates the appropriate amount of free weights required by a fitness facility. It generates suggested weight plate breakdowns, depending on the type and quantity of plate-loaded and free weight equipment that the club already has, or is planning to purchase. It also suggests dumbbell quantities, Olympic bars and racks when necessary. Iron Grip provides this tool to its customers and dealers at no charge, available at www.irongrip.com.
>> PCE Fitness, owner of the LifeSpan brand of products, has hired Corey “Wojo” Woinarowicz as its new West Coast sales manager and commercial sales manager. His territory covers California, Oregon, Washington, Utah, Colorado, Arizona, New Mexico, Idaho, Wyoming and Nevada. Woinarowicz has worked for X Sports, IC Solutions and as a bullpen catcher for the Los Angeles Angels. He can be reached at 714-262-9051 and Corey@lifespanfitness.com.
>> Analyzing U.S. Commerce Department stats, SGMA International reported that total sporting goods equipment imports grew 11.3 percent in 2004 to $4.96 billion, with gym/exercise equipment generating $1,476.2 million, a 14.9 percent jump over last year. The sports equipment export leaders are Mainland China (58.9 percent), Taiwan (8.3 percent), Canada (3.9 percent), Mexico (3.8 percent) and South Korea (1.9 percent). China’s share increased from 56 percent to 59 percent, slightly less growth than in 2003, while market shares for Taiwan, Canada, Mexico and South Korea declined in 2004 compared with 2003. Athletic footwear dollar value totaled $4.4 billion, a 6 percent increase from 2003. Total athletic footwear pairs imported increased by 4.7 percent from 394 million pairs in 2003 to 413 million in 2004. The average price per pair increased by 1.2 percent from $10.52 to $10.65, continuing a trend toward slightly higher prices for a second consecutive year. Mainland China is the dominant exporter of athletic footwear to the United States — a market share of 76.7 percent of the total dollar value in 2004. China’s share has maintained about a three-quarters share since 2000. Indonesia’s share fell to 8.8 percent. Vietnam widened its lead over Thailand for third place with an 8 percent share and is challenging Indonesia for second place. For 2004, the total dollar value for jogging/warm-up apparel, such as jackets, pants and sweatshirts, was $1.06 billion, a decrease of 2.5 percent compared with $1.09 billion in 2003. The total declared value of all U.S. sporting goods imports for 2004 was up 7.5 percent to $10.426 billion compared with $9.7 billion for 2003, SGMA said.
>> Life Time Fitness and Blue Cross of Minnesota partnering up to provide Blue Cross members with discounted initiation fees and membership dues rebates at Life Time Fitness centers. Why? In fall 2004, Blue Cross conducted a survey where Minnesotans said they believe they are an average of 18 pounds overweight and that obesity and inactivity are the fastest growing health risks in the United States. Under the agreement that grew from that response, Blue Cross members who are eligible for the discount program and exercise at a Life Time Fitness center on at least eight different days per month will receive a $20 monthly credit from Blue Cross toward their membership dues. Up to two individuals per household may participate and receive a combined $40 maximum monthly membership dues credit. Blue Cross also said its members can take advantage of a discounted initiation fee along with a comprehensive personal fitness screening, an individualized health and wellness action plan, and other Life Time Fitness education, exercise and nutrition programs and services.
>> Everlast Worldwide has entered into a licensing agreement with M&M Fitness LLC for the development of a line of aerobic and weightlifting equipment which will be marketed in the United States. M&M Fitness, which is based in New York City, will produce and market aerobic equipment (including treadmills, steppers, elliptical trainers and stationary bikes) and weightlifting equipment (free weights, home gyms, weight lifting benches and weight bars). Product available is expected by the third quarter of this year and will be sold through select U.S. sporting goods retailers. “Our licensing program continues to gain momentum as we expand our product offerings to the fitness market both in the U.S. and abroad,” said George Horowitz, chairman and CEO of Everlast Worldwide. “In addition, based on the success of the NBC reality television show, ‘The Contender,’ which features Everlast equipment, we expect consumer interest in fitness and the training techniques used by boxers to increase and drive demand for these products. We expect the lines produced by M&M Fitness, which has given us substantial minimum guarantees, to rapidly gain favor among consumers.”
>> TechnologyReview.com’s recent online article “E-Commerce Gets Smarter” looks at how smart e-commerce allows retailers to mesh in-store, catalog and online sales to offer their customers a full range of shopping options. The numbers are impressive. TechnologyReview.com said that Jupiter Research reported online retail spending was up 26 percent to $66.5 billion — 4 percent of total retail spending compared with nothing about 10 years ago. By 2009, Jupiter predicts, online spending will reach 6 percent of total retail sales. But that’s not all. Last year, another $355 billion in retail sales took place in physical stores after consumers had done their homework online. For every $1 consumers spend online, they spend $6 offline as a result of research conducted on the Internet. To check out the article, click here.
>> Getting physical may have gotten the former queen of the fitness video a new hip. Jane Fonda may undergo hip replacement surgery, according to a story in the Gulf Daily News. In the report, Fonda’s publicist Pat Kingsley confirmed that the 67-year-old actress “did undergo outpatient arthroscopic surgery to her left knee…and was back home recuperating.” But the surgery may not happen immediately. Kingsley told the publication that through the month of May, Fonda will be promoting her new autobiography, which hits stores next month, and an upcoming movie.