Fitness: Did you hear?…Fitness Gallery claims settled, plus Icon/Nautilus, SGMA, New Balance, IHRSA, Dunham, Slendertone, True Fitness, and more

For the weeks of June 28-July 11

>> In claims arising out of the October 2004 bankruptcy liquidation of Donnie Salum’s Fitness Gallery Arizona, Billy Salum and his Colorado businesses have agreed to pay the bankrupt estate $75,000. The fee will resolve all claims between the brothers about rights to use the Fitness Gallery name and other transactions involved in the separation of the Colorado and Arizona businesses. Of that sum, $2,000 will be applied to the purchase of the rights to the name “Fitness Gallery,” which was registered by the Arizona business in September 2001. Also, Billie Salum will waive any further claims and the Arizona estate will not pursue further claims, according to June 27 U.S. District Bankruptcy Court documents obtained by SNEWS®. In addition, the documents stated that the parties will also dismiss any pending litigation. The money will be divvied up among creditors.

>> Rep. Zack Wamp, R-Tenn., a scheduled speaker for the first SGMA Fly In for Fitness lobbying event Sept. 20-21, is part of a group that has introduced the H.R. 1634 bill to amend the Internal Revenue Code of 1986 to expand workplace health incentives by equalizing the tax consequences of employee athletic facility use. Fly In for Fitness is aimed at getting industry leaders to develop a policy agenda to take to members of Congress and communicate the impact of the fitness industry on America’s health crisis. For more information on the event or to register, click here.

>> Icon has filed a response to Nautilus’ request for reconsideration by the court of the May 25 order that would dismiss Nautilus’ patent infringement case against Icon. In it, Icon stated that Nautilus’ motion for reconsideration to the U.S. District Court, Western District of Washington, “is a hodge-podge of generally unconnected theories and allegations that are neither new nor persuasive.” Continuing in language that is less formally legalese than many similar documents, Icon also stated that “none of Nautilus’s recycled arguments has any merit.” The court had ordered Icon to respond by June 30 to a request by Nautilus for reconsideration of the court order granting summary judgment and effectively ending the case that began in late 2002. See SNEWS® story on the May order, May 27, 2005, “U.S. court dismisses Nautilus’ patent infringement case against Icon.” Meanwhile, a second infringement case involving the CrossBow is now scheduled to go to trial in January 2006.

>> Since 1999, New Balance has been a presenting sponsor of Girls on the Run International and is extending its sponsorship through 2007. New Balance said the group’s experiential learning program educates and prepares young girls for a lifetime of healthy living and self-respect, which fits in well with its corporate philosophies. As the presenting sponsor, New Balance provides assistance on both the national and local level. At the national level, it provides sponsorship funding, support of the annual Council Director Summit, and is the presenting sponsor of the Girls on the Run 5K Race Series. It also provides running shoes for 500 needy Girls on the Run participants every year. Locally, New Balance provides each council with its 5K race supplies, including race numbers and giveaway items. For 2005, New Balance is also offering a Girls on the Run kids’ athletic apparel line and will donate a portion of the proceeds from sales back to the national organization.

>> “Try, try, try again” must be the personal motto of Geoff Weber, a 37-year-old Navy Intelligence Officer, who succeeded in breaking a Guinness world record by running 50 kilometers in 3 hours, 41 minutes and 53 seconds. An attempt at the 2005 IHRSA show in March in the Nautilus booth to break world treadmill records for the 50K run failed after about 25 miles when he developed leg cramps. This time around, success came at the IDEA World Fitness Convention in Las Vegas where he beat the previous record by nearly three minutes — once again on a Nautilus treadmill in its booth. Weber held a pace of approximately 8.4 mph and averaged just over a seven-minute mile pace for the majority of the run. Weber said he hopes to break the world record for the amount of time it takes to run across America — currently set at 46 days. SNEWS® View: Oh my! We’re not sure if he means 46 days on a treadmill, but although the moving belt can be a good friend, 46 days on one sounds painful at best.

>> Starting this month, Dunham’s Sporting Goods and Academy Sports & Outdoors will sell the Slendertone line of products. Slendertone, a patented abdominal toning belt, is the creation of Compex Technologies, maker of electrical muscle stimulation sports and fitness products. Slendertone’s products have been approved by the FDA for firming, strengthening and toning abdominal muscles.

>> UNITED KINGDOM — The “State of the UK Fitness Industry 2005” report shows that 11.8 percent of the UK population — more than 7 million consumers — are either members of private health clubs or registered gym users. The survey was produced by The Leisure Database Company in conjunction with the Fitness Industry Association in the UK. Unlike the 2004 survey, this year’s included all private clubs in the UK, regardless of membership, resulting in an additional 600 plus clubs being included. The UK has 2,890 private clubs and 2,596 publicly owned health and fitness facilities. When comparing year-on-year figures, the survey showed that private club memberships have grown by 5.9 percent, which is in line with the previous year’s growth of 5.6 percent. Membership growth levels are due in part to new club openings.

>> True Fitness has selected Adamson Public Relations, a division of Adamson Advertising, to handle public relations for the company’s line of products. Adamson will work with True Fitness on publicity surrounding the launch of two new product lines in late 2005 and early 2006. Adamson will also provide brand support for True, including advertising, collateral and POS materials.

>> PowerBar has hired Mike McQueeney as the new sales manager for its sports specialty sales division. McQueeney joins PowerBar with more than 20 years of experience in the cycling and sporting goods industries. In his new position, McQueeney will manage PowerBar’s independent specialty sales force, comprised of more than 40 account managers across the United States, and the team’s 2005-2006 specialty sales initiatives including a newly formed partnership with Quality Bike Products and nutrition education programs in the field. An avid runner and cyclist, McQueeney comes to PowerBar from Denver, Colo., where he was the owner of two Golden Bear Bikes retail stores since 1997.

>> A recent IHRSA study found that commercial health club financial performance improved for the quarter ended March 31 compared to last year. Focusing on 12 mid-sized clubs representing 134 facilities, their total revenue was up on average of 4.3 percent to $13.2 million for the quarter. The participating companies also reported improved same-store revenue for clubs that have been in operation for at least two years, by an average of 3.9 percent to $11.5 million. The IHRSA index found that the average earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) improved by 13.5 percent to $3.8 million. As a percentage of total revenue, EBITDAR, was 28.7 percent of revenue for the first quarter of 2005 and 26.7 percent of revenue in 2004. The survey was conducted for IHRSA by Industry Insights.

>> Another IHRSA report, this one by American Sports Data, found that as of Jan. 1, 2005, U.S. health club membership reached 41,338,000 — an increase of 4.5 percent over last year’s 39.4 million. IHRSA’s annual American Health Club Trend report also found that 15.6 percent of the American population (age 6 and up) now belong to some type of health club. Between Jan. 1, 2004, and Jan. 1, 2005, another 25 million Americans were “health club patrons,” who may have purchased an individual program, or attended a club on a daily fee basis, or gratis. Other findings? U.S. health club members are 48 percent men/52 percent women; and in terms of age, the three major membership segments are: 18-34 — 29 percent, 35-54 — 35 percent, and 55-plus — 25 percent. For a copy of the report, contact American Sports Data at asd@cloud9.net.

>> Remember the days when it was how long you could go in a workout class. Now it’s how short can we go? 21 Minute Convenience Fitness, a fitness studio headquartered in Walnut Creek, Calif., is leading the charge… and expanding. It’s been approved to offer additional franchise opportunities in New York, Illinois and Virginia and is already working with several interested potential franchisees. Its program revolves around a “convenience” fitness concept — a sweatless, 21-minute program, done in street clothes and with a coach using 2005 handheld technology. The workouts are performed once or twice per week, and the company guarantees results.

>> The Monthly Retail Trade Survey, prepared by the U.S. Census Bureau, reported preliminary sales in sporting goods stores of $2.61 billion for April, up 13.3 percent from the $2.3 billion in April 2004. The increase follows a 5 percent increase in March. Year-to-date sales are $9.15 billion, up 6.7 percent from the same period last year. Total sales for calendar year 2004 were $29.74 billion, up 8.6 percent versus 2003’s $27.38 billion. Among the 28 retail categories in the survey, sporting goods stores’ growth for 2004 ranked in the top third and exceeded the 7.6 percent growth rate for all retail sales. The overall retail growth represented the strongest increase since 1999’s 8.4 percent gain, the census bureau reported.
 
>> In conjunction with Irwin Broh & Associates, NSGA (www.nsga.org) has published a participation survey of sports with lower levels of participation — “Sports Participation in 2004 – Series III.” Using a 30,000 household sampling versus the 10,000 sampling in other NSGA participation studies, this survey provides a more reliable picture of participants in these sports, it said. This is the second year of the survey. Among the 20 activities in the survey are Pilates and yoga. Demographic data on participants include gender, age, gender by age, household income, size and life stage, and socio-economic status. Geographic analysis includes nine census regions and participation data by metro area size. The 110-page survey costs $235 for NSGA members, $325 for non-members. For more information, contact the NSGA Information Center at 847-296-6742, ext. 108, or dkasen@nsga.org.

>> The nation’s 77.6 million baby boomers are heading into their grandma and grandpa years and retailers are chomping at the bit to spend their money, according to an article in The Detroit News. Stores and advertisements are aimed squarely at the potential windfall. In 2002, baby boomers’ after-tax income was $2.5 trillion (!), and it’s estimated that grandparents spent $23 billion on their grandchildren that year (!!). By 2007, baby boomers’ post-tax income is estimated to reach $2.6 trillion. One grandparent noted in the article that he’s at a stage in his life where he can afford “to spoil the little rascals.” Even banks are targeting grandparents. Wachovia has recently been advertising its 529 college savings account specifically to grandparents. SNEWS® View: Maybe that means it’s time for fitness and sporting goods companies to attract kids and youth to fitness games and accessories via their grandparents.

>> Increasingly, retailers are finding creative solutions in the form of highly specialized merchandise and engaging, easy-to-use websites. In fact, a targeted direct-marketing approach through catalogs and the Web can prove more profitable than traditional brick-and-mortar retail, experts say. In general, online orders are less expensive to process because customers key in their own orders, reducing the number of human order-takers necessary. Plus, developing a functioning e-commerce site can cost as little as $10,000, though $75,000 and up is more typical for a mid-size retailer, depending on its size and complexity. To market successfully online, you need to know your audience and what they’re looking for. Tony Svanascini, CEO of Americaneagle.com Inc., a Park Ridge-based web design and development firm, offered these site design tips: Make the site as easy to navigate as possible. Look for ways to reduce the number of clicks required to purchase a product. Include all product options, so that customers can make an appropriate choice. Make sure the type is clearly displayed and large enough to see. Don’t overdo the site’s artistry — too much decoration can detract from the primary goal of selling merchandise. Use Macromedia Flash technology appropriately. If it doesn’t help sell the product and is simply window dressing, eliminate it. However, it can be used effectively to scroll merchandise, showing more than one angle, for better viewing. Give the site a complete review every two years. Technology changes rapidly, allowing for new features. For example, as high-speed Internet connections are becoming the norm, companies can make their websites richer with more graphics and technology-based features. Increase the average order size by displaying related accessories.