After just over 10 months under a Ch. 11 reorganization plan, Body Masters is speeding ahead under court oversight on its plan to reduce costs and upgrade production so it can emerge a strong and viable company.
According to the court-filed reorganization plan, strength equipment specialist Body Masters has reorganized some management, pushed ahead with equipment design changes, streamlined production, updated its technology, improved steel purchasing methods to reduce costs and is working on improvements to sales, marketing and distribution.
With all these refinements and upgrades, President Ray Boudreaux told SNEWSÂ® that at the Club Industry show earlier this month the 26-year-old company had discussions with several former customers who are considering returning to the Body Masters line. Several current customers told SNEWSÂ® the company appeared to have rounded the corner and was still very competitive.
“Reorganization is not a lot of fun,” Boudreaux said, “but we felt all along it was good for the company.”
He added that the Lafayette, La.-based, company, which on Jan. 10, 2005 filed for Ch. 11 reorganization under the bankruptcy code, seems to be “better than half-way” through the plan and its goals. (Click here for a April 21, 2005, SNEWSÂ® update story, “Body Masters Ch. 11 hearings ongoing; company says business as usual.”)
“We want to let our customers know we’re going to be a strong company,” he said. Â
Looking back at what pushed the company into filing for bankruptcy reorganization, Boudreaux, who has been with Body Masters for more than 18 years, is straight: “We failed to modernize our manufacturing process soon enough,” he said. Plus, he said, the company’s designs, although still fully functional and biomechanically sound, had become “stale,” as he called it. “We lost the aesthetics.”
Combine all that with the sudden surge in steel prices that began a couple of years ago and suddenly Body Masters, which manufactures all its equipment in Louisiana, had trouble making a profit.
With solid court oversight and Ch. 11’s ability to hold creditors at bay, Body Masters has managed to reduce labor costs and upgrade manufacturing, including adding laser-cutting and in-house tubular-bending machinery, both serving to reduce welding costs. In addition, it is now buying 70 percent of its steel direct from the manufacturer, rather than paying the higher costs of a distributor.
In the last couple of years, the company has begun to upgrade its lines and, according to the fifth amended plan filed in late August with the U.S. Bankruptcy Court, Western District of Louisiana, Lafayette/Opelousas, Body Masters is now about 75 percent through redesigning the core equipment in its line, while it is also adding new pieces. Complete redesign should take them into the middle of 2006, Boudreaux said.
“We’ve had our hands full,” he added.
In addition to production and sourcing changes, Parrish Cline, former vice president of sales and marketing who has been with the company for 15 years, has taken over the role of CEO from his father, Robert. Parrish Cline has bought 100 percent of the stock in the company.
With the fitness industry moving toward one-stop companies that include both cardiovascular and strength, Boudreaux nevertheless maintained that Body Masters and being a stand-alone strength manufacturer is viable. Note that Star Trac bought Flex Fitness and Precor bought Icarian in the last two years.
“We’re not out to sell,” he said. “We feel we can be a stand-alone strength company. We do it real well,” noting that currently they also work closely with True Fitness in providing equipment.
“We feel as a company,” he said, “we are moving in a positive direction.”
SNEWSÂ® View: We must say that it is refreshing to see a fitness company not go from Ch. 11 reorganization to Ch. 7 liquidation. It was also refreshing to hear Boudreaux’s candor about what the company hadn’t done right and what it has managed under the plan. It appears that the company has truly taken the bull by the horns and has aggressively followed reorganization needs. We believe Body Masters could indeed emerge very soon. Sure, the company had taken a smaller booth than in the past at the Club Industry show and several on-site SNEWSÂ® sleuths said you had to look really hard to find it, but that seemed to be a reflection of perhaps having booths that were perhaps too large in the past. Our SNEWSÂ® on-the-scene reporters added too that the product looked better than it had ever in the past. Of course, we’re still not sure a stand-alone strength equipment company with a U.S.-based plant can really compete in the long term, but a reorganization like this could set it up for purchase by one of the few cardio specialists that is still without a strong strength component or by a company that needs U.S.-based manufacturing to better compete stateside. Time will tell on that front, but meanwhile we’ll lay money that Body Masters could say bye-bye to Ch. 11 in a few months.