2nd Wind blows into Windy City with big expansion plans

Confirming rumors that have been buzzing around the industry for a few months, Dick Enrico has told SNEWS® that 2nd Wind Exercise is headed to Chicago and should have up to eight stores open by the fourth quarter of this year in time for the busy season.
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Confirming rumors that have been buzzing around the industry for a few months, Dick Enrico has told SNEWS® that 2nd Wind Exercise is headed to Chicago and should have up to eight stores open by the fourth quarter of this year in time for the busy season.

That would put Enrico head-to-head with Scott Egbert's Chicago Home Fitness and Fitness Experts stores that now dominate the region with some 25 stores combined.

"We have elected to make a presence in the finest fitness market in the country," Enrico said after returning from a property scouting trip in Chicago, noting he found "many promising deals."

The third-largest market in the country by population (after New York with 18.7 million and Los Angeles at 13 million, based on the latest 2004 Census figures available) hasn't had competing specialty retailers since The Fitness Experience declared bankruptcy in January 2005 and shut its doors. Aside from Egbert's two chains, Fitness Factory Outlet (Body-Solid's four-store chain) and Wisthoff (three stores) are about the only other specialty fitness retailers in the area. The Chicago metro region of 9.4 million people also has a smattering of bike shops that have a smidgen of fitness, as well as the typical big box players (Dick's, Sports Authority and Sportmart) and mass players (Sears and its Great Indoors), plus the fitness division of The Great Escape where Doug Pearson and Tony Howell have been heading up the fitness segment.

"The market is so large, there is enough business to make us both successful, and it'll make him better too," Enrico added about upping the ante for Chicago Home Fitness and Fitness Experts.

Egbert noted that he too thought competition could bring more to the large market.

"Competition is good," Egbert told SNEWS®. "We've been successful because of the competition in the past."

Even Body-Solid's co-CEO Scott McDonald has heard the rumors and noted the market had plenty of room.

"We think it's a positive," McDonald said of the addition to the large market.

Industry observers are quick to point out that Enrico is perceived as being mostly in smaller markets and has entered areas where there isn't a lot of competition. Those are fighting words, it seems, to the folks at 2nd Wind.

"Every market I went to there is and was competition. It's just that I overpowered them…. Either I make the competition better or they go out of business," Enrico said. "When I go into a market, I stir it up a bit."

Chicago, he said, is just "the Twin Cities almost four times bigger."

Vendor musical chairs
With the arrival of 2nd Wind, several vendors have also opted to move allegiance from Egbert to Enrico. Life Fitness, Hoist, Vision Fitness, PaceMaster and Octane Fitness will all move to 2nd Wind when they open.

"This provides opportunity to do more business with some we've done a little bit with," Egbert said, naming for example Precor, Horizon, True and Diamondback. He said he may also try other vendors since "there are vendors galore out there."

However, the shift of Life Fitness to 2nd Wind is one that has happened suddenly: Life Fitness was left without a major retail partner in the area when The Fitness Experience went belly-up 18 months ago and it quickly partnered with Egbert's Fitness Experts stores, which were former TFE stores he bought in a bankruptcy auction.

"Shame on me for not having things buttoned up," Egbert said about that vendor's shift, pointing out it is now on its third CEO since he started with them.

Dan Wille, vice president and general manager of Life Fitness' consumer division, called the move to 2nd Wind logical and one that strategically best fit the company both short term and long term.

"We weighed all the pros and cons," Wille said. "There are decisions like this made all the time in the specialty business, and this was not one we took lightly."

He said that Egbert's four Fitness Experts stores in Michigan will continue to carry Life Fitness.

"Scott is a good partner," Wille said, "and he will remain a good partner."

Competition can float all boats
With specialty fitness still fighting for public recognition, the biggest advantage to more competition could be indeed greater awareness that could bring more business to all specialty dealers in the area.

"Enrico advertises a ton," said Body-Solid's McDonald. "He raises the general awareness of fitness in a market."

Even Egbert, as the current region dominator, said that another competitor who is a specialty retailer can help all specialty fitness.

"There's more to competition than 2nd Wind," Egbert said. "There's Dick's, Sports Authority, Sportmart and others too. I look at (2nd Wind) as just another competitor.

"Thirty stores, 10 stores, one store, it doesn't matter," Egbert explained. "If (Enrico) does as he's always done, he'll bring people to the market and that's great for everybody, and then it's just a battle of the salespeople."

Both express respect for the other, but are rolling up their sleeves, it seems, and both said they can prove themselves. Enrico said he has the same attitude as when he enters other new markets: "Let me earn my stripes."

Said Egbert, "I'm very competitive, but I don't want to get into a war with anybody. Still, it's very motivating."

SNEWS® View: The gloves are off and they have been tossed on the ground as Egbert and Enrico are ready to knock up against each other in the greater Chicago area. Previously, both seemed to politely stay out of each other's way and even seemingly worked together, for example, when Egbert bought a group of The Fitness Experience Stores in bankruptcy auction with the agreement that a few of them were going to be then simply sold to Enrico since they were on his turf. No more such gentleman's agreements will occur, we think. Egbert has managed to operate one of the most prominent and gorgeous stores in specialty fitness retail -- in the upscale and high-profile north Chicago Halsted Street area. If Enrico decides to move in down the way -- anything is possible, of course -- we expect there may be some glaring between stores. What brought the unspoken agreement to stay out of each other's way to this? Hard to say exactly, but we do know Egbert is moving into Enrico's area in Milwaukee (as the Precor dealer, of course) and that could have been interpreted as the first glove hitting the ground.

Of course, there is room in the Chicago area for more stores -- there are smaller metro areas such as Phoenix and Denver that have more stores it seems than Chicago with its huge populous. And if Enrico does the high-profile advertising with the attitude he normally offers, everybody could profit. What the industry doesn't need is somebody else going out of business or shrinking. We certainly hope none of this comes to that, just as we hope the two bosses can remain business-like in their endeavors and can simply use this opportunity to float all boats a little higher. We know with the buzz in the industry this will be one frontline that all eyes will be watching. As one industry insider said in an email to SNEWS®, "This will be fun to sit back and watch -- the 'Superbowl' of the fitness industry." Not sure we'd go that far, but it will garner some attention.

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