Fitness: Did you hear?…

>> More on the rather convoluted case that SNEWS® wrote about on June 18 concerning Nautilus suing two unrelated companies in one legal action charging trademark infringement. Those companies are Savvier (marketers of the so-called Body Flex breathing program) and Impex (owners of the Bodyflex trademark that isn’t being used). In a hearing held late last week (July 1), it was announced in the Western District of Washington U.S. District Court that Nautilus and Impex have reached a settlement and that part of the case has been dismissed. No other information was available. Another motion by Nautilus to strike the case has been denied. The case goes on, as does a parallel case brought by Savvier against Nautilus in the Central California U.S. District Court where a hearing is to be held this week on combining the two cases there. It has been said that any piece of exercise equipment with the word “flex” could be a target for a Nautilus (NYSE: NLS) trademark infringement suit.

>> Life Time Fitness Inc. (NYSE:LTM), which began selling shares on the New York Stock Exchange June 30, has been a surprise success in its first week as a public company. The company raised $183 million in its IPO with the sale of 9.9 million shares at $18.50 each. The niche nature of the company had analysts predicting that demand for the stock wouldn’t be high, but Life Time’s numbers were up 14 percent to $21 by the close of the first day. “What we expected to be a lackluster day turned out to be pretty good for IPOs,” Sal Morreale, who tracks IPOs for Cantor Fitzgerald LP in Los Angeles, said in a Dow Jones newswire. Dow Jones wrote that Life Time doesn’t come from a market sector generally associated with the IPO market and because of the niche nature, analysts didn’t expect a big price bounce, but demand turned out stronger than expected. Life Time Fitness, based in Eden Prairie, Minn., opened its first center in Brooklyn Park 12 years ago and now operates 34 centers in eight states. It earned $20.6 million last year on revenue of $256.9 million, two-thirds of which came from membership dues. The company’s 250,000 members pay $40 to $60 a month for single memberships and families pay $75 to $120. Venture capital firm Norwest Equity Partners, which owned 38 percent of the company, was among the selling shareholders and after raising $24.5 million in the IPO still owns more than 27 percent. Life Time’s founder and CEO Bahram Akradi will own less than 12 percent of the company. Net proceeds of about $75 million, 4.38 million shares, from the IPO will be used open new centers and reduce some of the company’s more than $200 million debt. As of July 6, stock price was $22.82.

>> The Nautilus Group, Inc. (NYSE: NLS) and Sears, Roebuck and Co. (NYSE: S) have joined forces in a trial offering of Schwinn Fitness brand equipment. Schwinn’s upright and incumbent exercise bicycles will be available in 30 Sears stores nationwide beginning this month. “We are very excited to be working with a global retail leader of the stature of Sears,” Nautilus Chairman and Chief Executive Officer Gregg Hammann said in a statement. “Earlier in the year, we stated that one of our key strategic initiatives based on our extensive consumer marketing research was to expand our product placement in the retail market through execution of a differentiated brand and product approach. This differentiated approach creates a winning strategy for all of our retail partners.” In other Sears news, the company announced on June 30 that it will acquire ownership or leasehold interest of up to 54 Kmart stores (Nasdaq: KMRT) and seven Wal-Marts (NYSE: WMT) for approximately $620 million in cash. All of the locations are off-mall and the majority are expected to be converted to Sears nameplates by fourth quarter 2005. The increase in Sears storefronts could also be a boost for Nautilus’ Schwinn exposure and sales.

>> In what was called an “unscientific survey” recently of small business owners by the Associated Press, regular exercise was one of the most frequently cited antidotes to burnout. Many owners said they make sure they get up early at least several times a week to get to a gym or a workout before they start their day. It just becomes part of their routine, they said in the survey.

>> More on the Cybex appearance at the G-8 Summit in mid-June: The company it seems was personally invited by a “senior official” from the state department, partly because the President (that would be Bush) knows the company because he also had just ordered an Arc Trainer for Camp David to complement the one he has at the White House. This is one trade show where you don’t pay but must be invited. Nevertheless, some didn’t show up because security, procedures and paperwork made it a logistical nightmare. Only 12 displayed their wares, and with 3,500 media from around the world, it was quite a showing for Cybex and, particularly, its new Trazer.

>> GERMANY— The first Runner’s World ispo award for outstanding products was given at the ispo trade show in Germany over the weekend. Products considered met standards that included innovation, suitability for use, potential for widespread use, good price, and innovative use of design, materials and shapes. Winners included a treadmill that is rather unique in that it is the only one in the world that is designed for, get this, walking with poles. That’s the new and hot activity called Nordic Walking that is booming in Europe and just being introduced in the United States. Given a “special award,” that company is Hammer with its Hammer Nordic Walking XTR treadmill. It is a normal treadmill, but it has two additional belts on each side where normally a wider side rail might be. Sort of mini additional belts, which are longer than the walking or running surface, where the user can plant his or her poles. Other winners include the adidas Ground Control shoe system, the Concurve Helium 80 apparel line, and the new Polar S625x Heart Rate + Distance Measuring Device

>> UNITED KINGDOM — Cardiff-based Arcmultigym has announced the UK launch of its multigym of the same name. It has been designed by the company – in partnership with Leisure Lines – and has nine stations and five covered weight stacks. The company is promoting is arc motion as one that moves with the body.

>> According to the Sporting Goods Manufacturers Association Recreation Market report just out, the U.S. sports products industry is worth nearly $70 billion (at wholesale) in size. That includes all sporting goods equipment including fitness, as well as sports apparel, athletic footwear, and recreational transport items and is a 0.5 percent increase over 2002. Exercise equipment remains the leader in the equipment category with a total of $3.8 billion in sales; the overall equipment category has a total of $17.5 billion in 2003 sales compared to $17.4 billion in 2002. In the exercise equipment category, treadmill sales account for 26.4 percent of the total. Also, sales of elliptical machines increased by 16.7 percent — from $120 million in 2002 to $140 million in 2003. After treadmills, the next two largest fitness categories are home gyms ($305 million) and exercise cycles ($200 million). Consumer spending for exercise equipment accounts for 81.3 percent of the entire exercise equipment category. Sports apparel sales fell 2.5 percent in 2003. Despite the slight drop, it is still the largest segment of the sports and recreation industry with sales of $22.8 billion. Athletic footwear sales rose 4.2 percent in 2003. Total sales were $9.73 billion, compared with $9.34 billion in 2002.

>> GERMANY — Jimmy Evans (no, we don’t know who he is either) will be riding a three-wheeled, self-propelled “Trikke” to Athens, leaving the ispo trade show in Germany on the weekend and planning to arrive in Greece for the start of the games in mid-August. Although already introduced in the United States, the Trikke was just introduced to Europe at the show. Evans said he’ll be doing it in the name of the environment and world peace (sounds like a Miss America show). For more: www.jimmy-evans.com, www.trikke-europe.com or www.trikke.com.

>> ClubCorp has added the responsibilities of chief executive officer to those of its current president and chief operating officer John A. Beckert. ClubCorp chairman and CEO Bob Dedman Jr., will continue as chairman. The changes are effective August 28, 2004. Beckert has led the company in its effort to focus on its core business of operating private clubs, country clubs, and golf resorts. His approach has contributed to the company’s improved operating performance.

>> GERMANY – In Germany, Asics has jumped to the lead in walking shoes after only being sold there for a few years. Sports Tracking Europe has found in statistics for sales covering January to May 2004 that Asics sold during that time more than 60 percent of the walking shoes and therefore now has a 43-percent share of the market

>> Nike Inc. has announced the appointment of three divisional vice presidents: Pamela M. Catlett as vice president of Nike’s Investor Relations; Jim Allaker as vice president, Finance, Planning and Operations for Nike’s Europe, Middle East and Africa (EMEA) region; and Hubertus Hoyt as vice president, EMEA Commercial. Each appointment is effective immediately.

>> In another just-out SGMA report the association has analyzed sports participation data and found some of these highlights: Females represent more than 60 percent of participants in fitness activities, such as stretching, fitness walking, aerobic dance, yoga/tai chi, other exercise to music, elliptical motion trainer, water exercise, Pilates, and cardio kickboxing. Health club memberships have almost doubled since 1990, reaching 39.4 million. Since 1990, extreme sports participation has skyrocketed. More information on this report and how to order it is available by clicking here.

>> A story in the Boston Globe last week lauded the fitness industry as pumping up job opportunities as more Americans recognize its benefits. According to correspondent Joan Axelrod-Contrada in a June 27 story, “fitness is becoming one of the fastest-growing fields in America.” Nationwide, employment is forecast to increase from 177,790 fitness workers in 2003 to 263,947 by 2012, according to the U.S. Bureau of Labor Statistics — an increase of almost 50 percent. The paper said opportunities range from part-time jobs teaching aerobics or weight training to full-time managerial positions in sales and operations at health clubs and other fitness facilities. Factors fueling the growth include the aging of the population and an increased interest in employee fitness by companies (partly because of the cost saving of healthy workers when it comes to insurance).

>> Seen in the window of a specialty running store in Knoxville, Tenn.: “Low Carb Running Shoes Now Available.”SNEWS® View: Irony so thick you can cut it. Need we say more?