Despite saying in May that the company "had Southern California covered," Busy Body's parent Fitness Holdings International has done it again: This time, buying LA Gym Equipment in a deal that will leave the new holding with its own brand and name.
"They saw value in LA Gym and they're quite impressed with our success," said Greg Ruffer, director of retail for LA Gym. "They want to keep everything intact and change very little. They want to maintain the culture of LA Gym."
The agreement, signed Aug. 9, once again moves in one giant leap forward the number of fitness specialty stores owned nationwide by FHI to 120, including 61 Busy Body Home Fitness stores in the West, 46 Omni Fitness stores in the East and the newly acquired 13 LA Gym stores, based in Arleta, Calif. FHI is the operating company for Hancock Park (www.hpcap.com), with Busy Body, LA Gym and Omni being the dba's for the stores.
That means that LA Gym will actually compete directly with Busy Body, with, for example, one store from each brand in West Los Angeles only a block part â€“ for now. In the Los Angeles area of Southern California, LA Gym has kept its hands on the Life Fitness and Vision brands, which are sold by Busy Body in other areas. In addition, LA Gym has Landice, Vectra and Octane. Busy Body's lead brand in the area is Precor.
Per a now finely honed routine, all LA Gym stores were closed for inventory and meetings on Aug. 10. Transition operations continued last week and this week with more store inventories and meetings. During the transition period, it is unclear how the corporate headquarters of LA Gym will be affected in the future. For now, most still remain in that office, with founders Ran Radzewsky, president, and Eli Ner-Gaon, executive vice president, apparently remaining only for a short time as consultants. Insiders said they intend to remain in the fitness industry. Neither returned several calls for comment. A spokesman for FHI also did not return numerous phone calls seeking comment.
This is the second departure in the last two years from Busy Body's mantra of doing only home fitness. In May, when Busy Body acquired Northridge, Calif.-based The Fitness Store, it also took on that store's commercial segment, as it also did in the acquisition of LA Gym, where it's been operated by Rick Barbee. (See SNEWSÂ® story, May 31, 2005, "Busy Body Home Fitness busy again: Acquires The Fitness Store-LA.")
Its first acquisition for 2005 came not quite three months ago when it took over the six branches of The Fitness Store on May 24. Before that, it had acquired 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). Also in 2004, FHI acquired Advanced Exercise Equipment in Colorado (August); Exercise Equipment of Nevada (June); and All About Fitness' retail division in Colorado, Nevada and Arizona (May), leaving the commercial segment alone. In 2003, it took over Hoist's Fitness Warehouse in San Diego, Calif. (November), and Omni's stores on the West Coast in October.
In May, Kenton Van Harten, president and COO of FHI and a Hancock partner, told SNEWSÂ® that the company would hit "between 65 and 70" by the end of 2005. With this move, the company has already surpassed that goal, and that doesn't count letter of intents that are out in several markets for additional outlets.
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
SNEWSÂ® View: Suddenly being married to what was for years your biggest "enemy," a.k.a. closest competitor, could be an interesting jolt for LA Gym sales staff and employees. If FHI can truly leave that company's culture alone and let it operate as it has, actually even continuing to stimulate friendly competition, it could make for a successful scenario. At least LA Gym long-timers Greg Ruffer and Rick Barbee will remain, but it's unfortunate that at least one of the founders won't stick around awhile to help keep the culture and brand intact. Of course, with a growth in specialty holdings by one company now reaching 120, there are more than a few in the industry who are getting anxious since in the past such large holdings often just collapsed and gave the industry a financial and emotional black eye. We hope this won't.