Although specialty fitness retailer Busy Body sees the light at the end of the tunnel of its Chapter 11 bankruptcy protection filing, its creditors are still wincing.
Thomas Staub, Aerobics vice president and chairman of the creditors' committee for the case, told SNEWS that the Carrollton, Texas-based chain owes the cumulative fitness industry $17.8 million, with the biggest debt to Precor weighing in at about $6.6 million. Staub says his small company -- maker of a three-treadmill line called Pacemaster -- is due $2.1 million.
"That's a big hit," he said. "That's the biggest hit I've ever taken…. But this is business. You lick your wounds and go forward."
Staub for one didn't waste any time going forward since Busy Body was nearly a third of his business. He hit the road in early summer to find replacement retailers in the markets where Busy Body was bowing out and has succeeded in finding stores in two-thirds of the former Busy Body markets that carried his treadmills.
Even as Busy Body still says it foresees exiting Chapter 11 in October, it won't be the same company. To save itself, it has closed stores and streamlined operations. In fact, senior vice president Scott Egbert quietly left the company in early August just before of the Health & Fitness Business Expo. "He resigned," said a company spokeswoman, but declined to offer details of why or where he was.
"Busy Body will downsize and come out of it," Staub said.
But that's not to say that when its creditors in the U.S. Bankruptcy Court, Southern District of Texas, only find they're getting a small percentage -- rumored to be about ps 20 percent -- returned of what they're owed, they won't still be feeling the pain.
SNEWS View: The fitness industry is a small enough community that companies won't easily forget the losses they took when Busy Body decided to bite off more than it could chew, leading to the need to file Chapter 11 protection. In fact, word is that Busy Body had some trouble trying to talk new dealers to come aboard its ship while stalking the aisles at the Health & Fitness Business Expo in Denver in mid-August. Heck, who wouldn't be a little wary, considering the losses some companies large and small have taken. SNEWS isn't convinced the chain will indeed recover enough to exit Chapter 11 in October, as it says, and if that's the case, it may face more troubles as consumers begin to find less selection at remaining stores.