Sales of all the remaining stores of specialty fitness dealer Busy Body have been approved by the court, and are expected to close Wednesday.
"They will cease to exist," said Thomas Staub, vice president of Pacemaster and chairman of the creditors committee for Busy Body's Ch. 11 bankruptcy. "I think all the vendors are happy we've been able to have an orderly liquidation prior to the busy season because it will allow all the manufacturers to stabilize their distribution channels."
Busy Body, based in Carrollton, Texas, declared Ch. 11 bankruptcy in May in the U.S. Bankruptcy Court, Southern District of Texas. At that time, the chain had 83 stores, but pared down storefronts after filing bankruptcy. As recently as August, Staub said the chain would likely downsize even more and come out of its tailspin, while a Busy Body executive claimed the company would exit bankruptcy as planned.
Instead, a month later when no investors and no turnaround were found, the court and the creditors committee began to plan the sell-off. And that opened the door for Scott Egbert, former Busy Body senior vice president who resigned in August just before the Health & Fitness Business Expo, to step back in. Egbert bought 18 stores in the Chicago and Michigan areas in the liquidation.
"It's nice to be back in," Egbert told SNEWS. He had sold his Fitness Warehouse chain in the Chicago area to Busy Body in 1995. "It broke my heart to see it turn into what it did. Every time I'd go back into the Chicago stores and see the condition of the stores, and see the morale, it just broke my heart. Now, I get a chance to turn that around."
Under the name "Chicago Home Fitness," Egbert bought the nine Chicago/Indiana area stores, sold one, and did not assume the leases on two. He also opened two new stores in Illinois, one in Deerfield and one in Downers Grove, leaving him with eight in that market. Under the name "American Home Fitness," he bought nine Michigan-area stores and retained them all.
Although still living in Texas, Egbert said he and his family will assess the possibility of a move back to the Chicago area after his three sons (in the sixth, eighth and ninth grades) finish this school year. Meanwhile, he said, he will spend much of each week in either Chicago or Michigan and the weekends at home.
"The fitness industry does a lot better when you have local ownership, and you have a relationship with the media and local businesses for co-marketing purposes," said Egbert, who likes his stores to be a part of their communities.
In addition to Egbert's purchase, the remaining stores and their new owners are: San Diego (5 stores), Fitness Warehouse/Hoist; Los Angeles (8) and San Francisco (5), Hancock Park equity company; Washington D.C. (6), Leisure Fitness; Boston (4), Total Fitness; St. Louis (3), Fitness Experience; Denver (2), Hancock Park; and Florida (5), Carlos Vasquez.
At the time of its bankruptcy filing, Busy Body owed the cumulative fitness industry about $17.8 million, with the biggest debt to Precor weighing in at about $6.6 million. Staub says his company -- maker of the three-item Pacemaster treadmill line -- was due $2.1 million. He now says the creditors will be lucky if they see 5 cents on the dollar back on what they're due.
SNEWS View: Another chapter closes as Busy Body, once one of the king's of specialty fitness retail, is no more. Somehow Halloween seems a suiting end to the chain. You know, trick or treat, with an emphasis on the trick. Perhaps as local ownership returns to many of the stores -- all now under a new banner -- they will be able to regain their success and also become viable community members. The creditors, on the other hand, don't have to just sit and say, "oh well," to their lost millions. They may still be able to rise up to regain some return.