Fitness: Did you hear?…
Cybex still seeking refi, new VP marketing at Stott, footwear sales hold own, IHRSA launches Europe mag, Gold's Gym gets ad agency, Tanita adds new models, Everlast cologne for your gym bag?, HF Biz Expo morning talks free, try Urban Challenge for something new
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>> Quickly approaching the end of its second quarter June 30, Cybex CFO Art Hicks tells SNEWS there is no update on any refinancing the company said it expected by that date. He also declined comment on rumors that it may not now occur until the third or fourth quarter. “The process is going as expected,” Hicks said. “It’s not taking any shorter or longer than expected.” He also said the company is not ready to announce an extension of the forbearance agreement, which now ends June 30, to Aug. 30. “We’ll make an announcement,” he said, “as soon as there is something to announce.”
>> Paul Minich has been named to fill the newly created position of vice president of sales and marketing for Toronto, Canada-based, Stott Pilates. The company’s growth has been phenomenal in the last few years and, Minich told SNEWS, “It’s a very exciting place to be.” He comes from sales and marketing experience in other industries, most recently as vice president for store operations and general manager of sales for the Canadian office of Napa Auto Parts. “It’s new involvement” in fitness, he said. “What I bring to the table is a detailed background in distribution.”
>> Sales of athletic and sport footwear grew 1 percent in 2002 to $14.1 billion despite an overall decline of 3 percent in the average price of that footwear, according to data in the recently published National Sporting Goods Association consumer study of sports equipment and footwear purchases. Purchases continue to be led by the walking shoe category, which grew to $3.4 billion, a 4 percent increase compared to 2001. Overall unit sales grew 2 percent, fueled by the “buy one, get one” promotional environment during the year, the study said. This allowed modest growth in spite of the declines in average price. For more information on the report, contact www.nsga.org.
>> In other NSGA news, the association reports that U.S. sporting goods manufacturers managed to increase sales and profitability in 2002, according to its 20th Annual Study of Financial Performance. The results were reported by 61 manufacturers (privately and publicly owned) in the athletic footwear, sports apparel and sports equipment industry segments, having combined sales of $27.2 billion in wholesale value in 2002. Among the findings, the report said sporting goods manufacturers’ sales growth (+6.8 percent) surpassed the growth of the national economy, as well as that of non-durable goods manufacturers; and gross margin (38.6 percent) improved substantially. In addition, overhead cost-cutting practices brought more to the bottom line, as return on sales (5.9 percent), return on assets (8.2 percent) and return on investment (13.8 percent) ratios all improved.
>> IHRSA will launch a new magazine for Europe called Club Business Europe (CBE) on Sept. 1. It will be designed to serve the owners and operators of health and fitness clubs in Europe. The inaugural edition will be sent to 7,500 health club operators across Europe, including the U.K., Scandinavia, Germany, Italy, the Benelux, Spain and Eastern Europe. An English-language publication, each edition of Club Business Europe will include one-page summaries of the magazine contents in German, Italian and Spanish.
>> One man based in Taiwan has much of the business making shoes for the biggest manufacturers, according to a story in Reuters. “Tsai Chi-jui got into Taiwan’s top business ranks by making shoes for the world’s slickest athletic brands, but you would have a tough time picking him out in a crowd.” He is apparently a low-key former arts teacher and son of humble weavers in central Taiwan who is described by colleagues as an incurable optimist. Tsai, 65, heads the world’s largest manufacturer of brand shoes, boasting a 16 percent global market share with factories spanning China, Indonesia, Vietnam and the United States. The family-run Pou Chen is the biggest supplier of sports shoes for the world’s top five athletic brands — Nike Inc., Reebok International Ltd., adidas-Salomon AG, New Balance Athletic Shoe Inc. and Asics Corp. It also makes casual shoes for Timberland, Reebok’s Rockport Co., privately owned Clarks of the United Kingdom, and Jones Apparel Group Inc.’s Easy Spirit. “Like many Taiwan businessmen who have quietly amassed fortunes by investing in low-cost China, Tsai hobnobs with political and business leaders on both sides of the Taiwan Strait, helping to turn the greater China region into the world’s most well-oiled export machine. Even so, Tsai is intensely private and likes to keep a low profile. That may change, as his firm’s Hong Kong unit, Yue Yuen Industrial (Holdings) Ltd., with annual sales approaching $2 billion, joined the Hang Seng Index on Monday, cementing its stature among the territory’s blue chips. Pou Chen now employs a quarter of a million people worldwide. Its first-quarter profit nearly tripled to T$3.18 billion (US$92 million), even as Taiwan’s economy struggles to recover from its worst ever recession in 2001.” Its first big-name client was adidas in 1980. To read the whole feature, click here.
>> Henderson Advertising has been named the agency of record for Venice, Calif.-based, Gold’s Gym International Inc. Henderson will provide advertising, promotions, point of sale, direct marketing and website development for Gold’s Gym International, which includes 650 gyms in 34 countries. Henderson will manage quarterly materials and turnkey promotions for parent company Gold’s Gym International, which is over and above the multi-million advertising budget for Gold’s Gym franchise owners.
>> Tanita Corp., well-known manufacturer of scales plus body fat monitors, will introduce six new models priced under $100, while the company’s UltimateScale dropped in price to $39.99 on April 1. The new models will include advanced features previously found only on models retailing for more than $100, such as an estimate of the number of calories needed to maintain current weight, and body fat percentage and weight recall to compare previous readings to current readings. These new models will be available to consumers in July. Tanita’s complete line of Scale plus Body Fat Monitors expands this year to 18 models, 13 of which retail between $39.99 and $100.
>> Next time you pack your Everlast boxing bags and gloves, don’t forget your Everlast cologne. No, really. Everlast Worldwide Inc. (Nasdaq: EVST) has announced that it has entered into a licensing agreement with PAC Paris, a worldwide marketer of fragrances based in Paris, France. Under the terms of the agreement, a line of Everlast beauty care products, including men’s and women’s fragrances, deodorants and grooming aids, will launch in October 2003. PAC Paris was founded by highly regarded fragrance marketers, Etienne de Swardt and Laurent Jugeau, who possess a combined 30 years of experience with several of the largest fragrance houses in Paris. The Everlast line will be developed and launched by PAC Paris in conjunction with Givaudan, Paris and Labrosse et Dupont, the fragrance subsidiary of Louis Vuitton, Moet and Hennessey (Groupe LVMH), Paris. George Q. Horowitz, chairman and CEO of Everlast, said, “Licensing remains a highly-profitable cornerstone of our strategic growth program. Revenues generated by our licensing agreements increase through the years for a number of reasons. In addition to upfront commitments, we receive growing annual minimum royalty guarantees on each agreement.”
>> Wal-Mart Stores, Inc. (NYSE: WMT) reported net sales for the four-week period ending May 30, 2003, of $18.953 billion, an increase of 10 percent over the $17.231 billion in the similar period in the prior year. Sales for the 17-week period were $77.322 billion, an increase of 9.9 percent over $70.331 billion in the similar period in the prior year.
>> This year, morning conferences and lectures at the 2003 Health & Fitness Business Expo & Conference will be free to attendees and sponsored by various companies. The opening keynote on Aug. 7 by Doug Comstock (“Drawing your line in the sand on price”) will be sponsored by BodyCraft. Attendees will automatically be entered into a raffle drawing for $500 cash. So be sure to wander from there directly over to the BodyCraft booth after the talk where the winner will be announced. Friday’s special session will be a panel discussion titled “Multi-Sports vs. Specialty Retailer: Where is specialty fitness headed?” A breakfast will be provided by Theradyne. Saturday’s talk will be called “The American Fitness Revolution: Past, Present and Future” by Harvey Lauer of American Sports Data. All will be from 8:30 to 10 a.m. And don’t forget the Industry Party, again at the Wynkoop Brewery with lots of beer and pool: Thursday from 5:30 to 7:30 p.m., sponsored by SportsArt and Spri Products. For more information on the show, go to www.healthandfitnessbiz.com.
>> Moving Comfort, manufacturer of women’s high-performance activewear, and Running Times Magazine havedeveloped a new women’s section for the Running Times website, www.runningtimes.com. The section contains information for women on general training and racing, tips for running while pregnant, nutrition advice, a beginner’s section and articles of interest to women from past issues of Running Times. In addition, the women’s section will also contain the comprehensive Moving Comfort/Running Times Women’s Race Guide that will appear in the October 2003 issue.
>> Sears, Roebuck and Co. (NYSE: S) has announced that comparable domestic store revenues decreased 1.9 percent for the four weeks ended May 31, 2003. Total domestic store revenues were $2.18 billion in May 2003, compared with $2.21 billion for the four weeks ended June 1, 2002.
>> Ever wonder what others think of all those exercise gizmos on TV? Check out this website, http://www.fitnessinfomercialreview.com. An independent website, it’s a place where consumers can simply chime in with their two-bits about whether something is top or a flop. Worth a peek.
>> If you’re looking for a bit more of a challenge than 30 minutes on the treadmill, check out www.urbanchallenge.com. Urban Challenge is a cross between marathon, adventure race and treasure hunt on city streets with teams of two. It’s not just the fastest who wins, but who uses their noggin to solve clues to get to each of 12 checkpoints in a certain order. There is no set race course, and participants have to navigate on foot or only with public transportation (Rules state “no rickshaws” so leave yours at home). Of 22 races this year, many are still up for grabs: June 14, Twin Cities; June 21, Philly; June 28, Boston; July 19, San Francisco; August 2, San Diego; August 16, Portland; August 23, Seattle; August 30, Washington, D.C.; Sept. 6, Denver; Sept. 13, Raleigh; September 20, Austin; September 27, Dallas; October 4, Las Vegas; October 18, Phoenix; October 25, Fort Lauderdale; November 14-16 (Nationals), New Orleans.
>> You think that working out in the local club is an escape from the everyday? Ah, a place to zone out and sweat without the bombardment of our culture. Not so if you go to Bally. Bally Total Fitness and indoor advertising company Zoom Media have announced a partnership to place and market advertising in Bally locations nationwide. Yup, yessire, those signs will be on your club walls, staring at you during your workout. The announcement said they will place “high-quality, back-lit signs in Bally exercise areas, and sleek, traditional signs in the intimacy of Bally locker rooms.” Look for the ads to invade your space in July at its nearly 400 clubs. For more info on Zoom, go to www.zoommedia.us.
>> Life Time Fitness Inc. has announced health and fitness magazine, Experience Life, is available nationwide on retail newsstands and via paid subscription. Previously available only to Life Time Fitness members, this publication now is available at most Barnes and Noble, Borders and B. Dalton locations nationwide. The magazine already upholds a bi-monthly circulation of more than 400,000 readers. According to Life Time Fitness, “unlike many other fitness publications, Experience Life does not promote quick-fix fitness gimmicks or ‘perfect body’ fantasies. Instead, it strives to educate, inspire and coach readers toward establishing and fulfilling their own goals in a way that brings them maximum satisfaction.” www.lifetimefitness.com/magazine
>> Champion Athleticwear has announced the launch of a new advertising campaign titled “Greed vs. Love.” The campaign, which will include broadcast and cable TV plus extensive national print placements, reinforces the heritage of the Champion brand and the emotional connection that people feel when they achieve their personal goals through sports and exercise. “‘Greed v. Love’ is about the love of sport, not the quest for big money,” said Ted Barton, president-creative of Publicis in Mid America Dallas. “It communicates that true champions put their hearts into everything they do. They play because they want to, not because they have to.”
>> German sports equipment firm adidas-Salomon said recently it expected no upturn in U.S. markets in the second quarter of this year but forecast a pickup in new orders in the third quarter ahead of a product launch. Speaking at a conference in Frankfurt, Germany, adidas CFO Robin Stalker said U.S. business would likely be boosted by new products to be marketed in the fourth quarter of this year, orders for which would come in the previous quarter.
>> Banc of America Securities in late May said it began coverage of Reebok International Ltd. (NYSE: RBK) with a “buy” rating and a $41 price target, saying the athletic shoe and clothing maker has completed an impressive turnaround and is positioned to grow. Shares of Reebok closed at $33.35 on June 9, up from $29.97 the day before the announcement May 20. In addition, Banc of America Securities said at the same time it started coverage of Nike Inc. (NYSE: NKE), the world’s largest shoe company, with a “buy” rating and a $62 target, citing expanding margin and declining capital expenditures. Shares of Nike closed at $55.28 on June 9, up from $52.54 also the day before the announcement.
>>The second Ativa store for active women (the retail concept being piloted by Dick’s Sporting Goods) opened softly in late May outside of Buffalo, N.Y. What did our SNEWS spies tell us? “Too expensive for Buffalo. Why did they think this market would support $58 stretch things? If it isn’t marked ‘sale’ or ‘clearance,’ most folks here don’t buy.” She was, however, impressed with the nicely merchandised and sectioned apparel areas like yoga, pilates, running, golf, tennis and maternity, among others. But on a second visit, she noticed the maternity stuff was already gone. She asked what happened, only to be told it wasn’t selling. Nice concept, but maybe Buffalo isn’t ready for the concept. Or the prices. Maybe that’s why the likes of NikeGoddess stores open in Southern California.