In a move to more fully penetrate the Southern California region, Busy Body Home Fitness has sealed a deal to take over The Fitness Store, based in Northridge, Calif., and run by Mike Cirillo and Jim Watson since 1981. Â
"We're retiring from the fitness business," Cirillo said about himself and Watson, both 62. "How 'bout that? By golly, it's a good time to be doing it."
The agreement, signed Tuesday evening May 24, takes Busy Body's still-growing specialty empire to 60 stores. If you add in the Omni Fitness stores owned by the same investment company, Hancock Park, the total owned by the company is 106. Busy Body is the dba for Hancock's operating company Fitness Holdings International (FHI).
The company's last acquisition was the formerly Life Fitness-operated Omni chain, based in Connecticut, in late October 2004 (See SNEWSÂ® story, Nov. 5, 2005, "Busy Body owner Hancock Park buys remaining Omni stores from Brunswick). Prior to that, FHI acquired Advanced Exercise Equipment in Colorado, August 2004; Exercise Equipment of Nevada, June 2004; All About Fitness' retail division in Colorado, Nevada and Arizona, May 2004; Hoist's Fitness Warehouse in San Diego, Calif., November 2003; and Omni's stores on the West Coast, October 2003.
Founded in 1986 and based in Los Angeles, Hancock Park (www.hpcap.com) re-entered fitness retail after it bought back 15 Busy Body locations, including eight in the Los Angeles area, that were part of that national chain's spectacular 2001 bankruptcy. Prior to that, Hancock had built the chain, before selling it, and remained one of that bankruptcy's largest creditors.Â Â Â
"We sort of have Southern California covered, from Los Angeles proper down to Orange County and San Diego," Kenton Van Harten, president and COO of FHI and a Hancock partner, told SNEWSÂ®.
The goal in the acquisition was not only to fill in geographically, but also to take a competitor out of the market and gain some product lines in the area, such as True Fitness and TuffStuff, said Van Harten, who had contacted Cirillo and Watson in March about a possible deal.
The Fitness Store's six locations were closed Thursday, May 26, but re-opened Friday, May 27, with employees wearing Busy Body shirts, handing out Busy Body business cards, and answering the phones, "Gooooooood morning,â€¦. Busy Body," albeit with a hint of a stumble over the name. In-store banners read "Proud new member of the Busy Body family." By mid-day May 27, the old TFS website (www.tfs.la) was re-directed to a welcome page that read, "The Fitness Store is now part of Busy Body Home Fitness," before a visitor was redirected to BusyBody.com. Â
After six fitness specialty retail acquisitions in the last year and a half, Van Harten said, the Busy Body team has the transition routine down pat and moves quickly to tighten down the ship. But that doesn't mean all the decisions have been made about which doors will stay open, which brands will stay in the line, or when the signs and names will change.
"We try to move through these things pretty quickly," said Van Harten. "But we do want to make sure the consumer understands that this is now that."
Retiring ain't easy â€¦ pass the golf clubs
Cirillo and Watson, after a combined 48 years in the fitness business, aren't ready to set sail into the sunset, however. You can find both involved in their other business, Shower Up (www.showerup.com), for all those tall folks who are tired of banging their heads and doing backbends under showers too low for them.
But after "raising our child" for 24 years, as Cirillo called the fitness stores, it won't be easy to step aside, which they officially did when the contract was signed last week.
"It's a tough thing," he said. "You always want to make it work well, and you hope for the best."
The Fitness Store's six locations and warehouse have about 40 employees. The business has always done its own delivery and service, while FHI's model has been to outsource that segment.
In a switch however from maintaining it only does home fitness (thus the name, Busy Body HOME fitness), FHI has also acquired TFS's commercial division, which has been run by Matt Ouvrier and was about 8 percent to 10 percent of the total business, Cirillo said.
"They have it in place, and it's something we'll try," Van Harten said. "It's worked for them, and they have the infrastructure."
Cirillo called this week "button up week," as he takes care of the last payroll, talks to employees, and packs up two dozen years of memorabilia.
"We have no plans to do anything," he said, "except enjoy life, be it golf, or the grandchildren, or whatever â€¦ kickin' back."
Next on the docket
Next for Hancock Park dba FHI will be a few more stores this summer, with one opening in Phoenix soon, and four additional letters of intent in other areas signed, said Van Harten, declining to name the cities for the next four. By fall, he said, Busy Body's countÂ should hitÂ between 65 and 70, where it will hold tight for the holiday and New Year's busy season.
Van Harten said a sale by Hancock Park of Busy Body isn't planned anytime soon, but that the appropriate opportunity will present itself at some point. As he states when it comes to acquisitions, "never say never."
"We're happy with the performance," he said. "We're running this company as if we're going to run it forever."
SNEWSÂ® View: After last fall's acquisition of Omni East, Van Harten said nothing else would happen until spring 2005. And so it didn't. Still, despite the respite from the acquisition tear of nearly seven months, a few in the industry are starting to furrow their brows a bit as HP's Busy Body continues to grow. Many still feel the sting from the 2001 bankruptcy of the former Busy Body, which burned the cumulative fitness industry for nearly $18 million, and Hancock Park, which had sold the company to the owners, for a heck of a lot more since it was still owed in part for the sale. But some of those same industry players in the next breath mention how well-run and business-like HP is. That's the obvious picture, looking at the company partly run by partners Van Harten and Brian McDermott. Assuming the solidity is true, the stores and the industry should be fine -- as long as HP doesn't sell it off. After that, it's anybody's guess unless someone with truly solid business acumen takes it on. Meanwhile, we know today's Busy Body Home Fitness will hit at least 65 by fall -- with one in Phoenix in the works and four letters out. But to hit 70, as Van Harten said? That may just take another small acquisition. Now's the season, and we wouldn't be surprised at all if HP decided to lock up another region with strong population growth. Utah? Nevada? Maybe just more in Arizonaâ€¦. We're on the edge of our seats.