Fitness: Did You Hear?…

The Sports Club Co going private? Sears comp stores up 9.4 percent, John Agoglia misses IHRSA ... for the birth of his first child, health club complaints to BBB steady, Gart Sports income up, Club Com acquires Enercise, IHRSA study shows clubs doing fine, you think IT is key to business?

>> The Sports Club Co. is getting serious about going private again, SNEWS is told, just as it released its fourth quarter results for the quarter ended Dec. 31, 2002, showing EBITDA up a rousing 469.5 percent. Apparently, a committee has been organized to consider the move. Meanwhile, the company (SCY) showed net loss for the quarter of $3,461,000, or $0.21 per basic and diluted share in 2002, compared to a 2001 fourth quarter net loss of $24,886,000 or $1.39 per basic and diluted share. For the year ended Dec. 31, revenues increased 20 percent to $122,488,000, compared to $102,044,000 for the year ended Dec. 31, 2001, an increase of $20,444,000.

>> Sears, Roebuck and Co. (NYSE: S) has said comparable domestic store revenues decreased 9.4 percent for the four weeks ended March 1. Total domestic store revenues were $1.7 billion — a 7.9 percent decrease compared with the four weeks ended March 2, 2002. The decrease was blamed mostly on the severe weather on the East Coast, particularly over the President’s Day holiday weekend when 130 stores and distribution centers were forced to close. Sears is also shifting some promotions from February to March. Full-line stores still showed single-digit growth in footwear.

>> Wondered why long-time fitness journalist John Agoglia wasn’t at the IHRSA show in his present capacity as editor of Club Industry? Because he had better things to do since his wife Janine was having their first baby. Jake Rocco was born at 1:32 a.m. March 1 after more than 24 hours of natural labor (yikes!). “Janine is officially the toughest person I know,” Agoglia said about the delivery of the 7-pound, 13-ounce boy. “He is cute (he takes after mommy),” he added. “And both of them are doing great.” Big congrats, and we’ll definitely excuse him from missing the show.

>> Complaints about health clubs to the Council of Better Business Bureau in 2002 (one for every 851,385 health club visits) increased slightly over complaints registered in the 1999 report (one for every 858,746 visits).

>> Bally Total Fitness (NYSE: BFT) has launched a nationwide campaign called “Metabolic Month.” Designed to education consumers about the importance of their metabolism, the company will offer two-week free guest passes to its clubs as well as make arrangements for a discounted metabolism assessment. “Weight loss is a very basic mathematical equation,” said Dr. Jason Convisor, for Bally.

>> Fourth quarter net income increased to $12.8 million at Gart Sports, or $1.03 per fully diluted share, compared with $11.0 million, or $0.95 per fully diluted share, in the prior year’s fourth quarter, excluding the effect of $3.3 million net of tax, or $0.29 per diluted share, of one-time integration costs associated with the company’s 2001 acquisition of Oshman’s Sporting Goods. Total sales for the 13 weeks ended Feb. 1, 2003, increased 0.3 percent to $316.8 million compared with $316.0 million in the prior year’s fourth quarter. Fourth quarter comparable store sales decreased 3.2 percent from last year. Net income for the 52 weeks ended Feb. 1, 2003, increased to $23.2 million, or $1.86 per fully diluted share, compared with $15.9 million, or $1.54 per fully diluted share, in the prior year, excluding the effect of $7.6 million net of tax, or $0.74 per diluted share, of one-time integration costs associated with the Oshman’s acquisition. Total sales for the 52 weeks ended Feb. 1, 2003, advanced 12.3 percent to $1,051.2 million compared with $935.7 million in the prior year. Comparable store sales during the fiscal year were unchanged.

>> Merrill Lynch on March 4 raised its 12-month price target for Nike Inc. (NYSE: NKE) to $53 from $51, citing factors such as better sales. Analyst Virginia Genereux also raised her 2003 per-share profit view for Nike to $2.79 from $2.76 and in 2004 to $3.18 from $3.12. Shares of Nike closed at $46.68 on the NYSE on March 3.

>> Bally Total Fitness Holding Corp. (NYSE:BFT) has named Gail Holmberg as vice president and chief information officer, reporting to Bill Fanelli, senior vice president, finance. As CIO, Holmberg will be responsible for Bally’s overall technology strategy, IT investment portfolio and IT alignment with the company’s business objectives.

>> ClubCom, a provider of private media networks for commercial health clubs, has acquired Enercise, a manufacturer of exercise entertainment hardware products. The transaction is expected to close at the end of April. Cardio Theater is a wholly owned subsidiary of ClubCom, making the company the owner of the world’s two largest providers of fitness entertainment. Both Cardio Theater and Enercise will operate independently and directly compete.

>> In a study of 18 leading U.S. health and sport clubs (including 259 facilities), club association IHRSA found the overall commercial health club performance in the quarter ended Sept. 30, 2002, remained solid compared to the previous year. The survey found that average same-store total revenues — revenues for clubs that had been in operation at least two years — improved by 2.1 percent to $9.1 million for the third quarter of 2002. In particular, non-dues revenues from services like personal training increased by 6.6 percent over the third quarter of 2001, to an average of $2.3 million.

>> Executives and company managers said in a recent survey that Customer Service and Information Technology remain the top two departments that will provide their organizations with the most strategic competitive advantage, with R&D and Marketing coming in next. But, in a typical corporate scenario, they also say that IT is one of the most under-funded departments. In order of under-funding in the Net Future Institute research (, respondents called out R&D as No. 1, IT as next, and Marketing as third. Said one respondent: “In difficult financial times, the tendency is always to cut ‘what we can get along without.’ It’s the keen competitor who knows when to take advantage of the edge provided by marketing, R&D and info technology.”