Fitness: Did you hear?...

Icon CEO responds to Consumer Reports' analysis, Dept. of Commerce reports number of specialty fitness stores down, colleagues bid adieu to SGMA's John Riddle, Polar monitor solves CSI-NY crime, plus much more...
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For the week of Jan. 11-17

>> A month after a harsh review appeared in Consumer Reports magazines that called Icon products "lemons," the company's CEO has commented about the report with what he called frustration. Despite several emails and voicemails seeking comment by SNEWS® for a story (see story, Dec. 9, 2004, "Consumer Reports picks fitness equipment Best Buys, calls Icon products 'lemons'"), Icon did not make a public statement previously. But in a quarterly earnings call with analysts and media Jan. 13, an analyst asked executives what they thought about the report. David Watterson, CEO, claimed the magazine, which he called "an interesting publication," had basically rated products from the highest price down. "That's not necessarily reflective of what the consumer is doing today," Watterson said. "We also view this as a continuing issue, and we're working with Consumer Reports to understand their testing concerns." Watterson said the company's return rate on one of the treadmills tested that the magazine called "not recommended," the Nordic Track 7600R, is less than 1 percent, and the company shows no record of the service calls the magazine said it made to the company when it had problems. The magazine wrote that there were a "dismaying" number of problems with some equipment and "many of the problem-prone machines were from Icon Health & Fitness, the maker of Nordic Track, Pro-Form, Reebok, Image and Weslo machines…" Added Watterson to analysts listening to the call: "We're a little frustrated by it, but we'll get with the publication and see how they do it and get it to turn around."

>> The U.S. Department of Commerce's Census of Retail revealed that the number of specialty stores that sell exercise or fitness equipment was down 33 percent -- a 10-year low. Reporting 2002 figures, the Census of Retail said there were 1,861 specialty stores, compared to 2,796 in 1997 and 1,876 in 1992. While store numbers were down, sales of exercise or fitness equipment were up 6.5 percent -- $3.8 billion in 2002 versus $2.3 billion in 1997. Sales of exercise equipment at specialty sporting goods stores in 2002 were $954 million, down 5 percent from the $1 billion in 1997. At full-line sporting goods stores, sales were reported at $820 million in 2002, a 43 percent increase from $573.7 million five years earlier. Department stores represented the largest retail channel for exercise equipment in 2002, with Sears leading the pack. Department stores accounted for $1 billion in sales in 2002, up from $229.6 million in 1997. Sales at discount stores fell from $257.1 million in 2002 from $437.7 million five years earlier.

>> At the 2005 Super Show, taking place Jan. 17-19 in Orlando, Fla., SGMA executive director John Riddle was honored at a retirement party the night before the show. About 125 people attended the cocktail party and dinner at the Peabody Hotel -- an event that was tagged "In celebration of the career of John Riddle." After the social and dinner, speeches took the better part of 90-plus minutes as friends, old frat friends, golf buddies, family and colleagues told stories and said thanks. "You've set the bar high for us," said Tom Rogge, former SGMA chairman and president of Porter Athletics. "I hope we're up to the task." Said Garry Cook, director of team sports for Nike and, coincidentally Riddle's son-in-law, said, "He has a new role and it's a role of grandpa." Tom Cove, incoming executive director, told the audience that Riddle's "honor and integrity were unsurpassed" and presented him with season tickets to the Atlanta Braves. Riddle came on as executive director in 1988.

>> Perhaps not a nationwide research with any kind of statistical significance, an early January reader response to a question about working out in the Sacramento (California) Bee recently is still worth a look. The paper asked readers to write or to email their responses to the following question: "It's a new year and you resolved to get back in shape. Where will you work out at your home?" Nearly a quarter of those who responded (24 percent) checked the response, "Work out? Who has time!" Another 21 percent said, "I will walk or jog around the neighborhood." The next highest answer, with 14 percent of respondents choosing it, was "In a separate room set up as a gym," while 9 percent said, "In a garage using exercise equipment or weights." The last answer, with 7 percent choosing it, was "In front of the TV doing a workout video."

>> Marketing coup: Polar heart rate monitors must have nailed the best and least expensive piece of free promotion last week ever. On an episode of CSI-NY Jan. 12, a bike messenger is killed. So happens the messenger is wearing one of the fancier models of Polar's monitors designed for cyclists that tracks speed, mileage, heart rate, altitude, you name it. Polar gets a full shot of the chest transmitter belt, with logo, when the police get to the scene. Later, in the lab, an investigator explains in exacting terminology to a police officer what a monitor like that does and how it works. Based on recorded data of speed, altitude, distance and heart rate, the police then solve the crime because they can tell exactly where the messenger was and when. "You can't even pay for that," said Dominic Privitera, Polar marketing manager. "They used our watch to solve the crime."

>> Congrats, Super Show for one change: There were no girlies wearing tight short-shorts, low-cut tops and high heels at the floor entrance handing out programs. Indeed, there were girls, but they had simple bike-length tights and tank tops -- tight, to be sure, but, heck, that's the way they're worn -- and flat tennies. In fact, speaking of girlies, there were really none to be seen, at least on a perusal of some of the show floor on the first day, Jan. 17. There were the typical aisle promotions with people on bouncy shoes, guys on scooters, kids doing karate demos, and the like, but that's all truly part of the sports business that in most cases involved athletic people doing what they do best.

>> Started in a garage in 1983 when CEO Nerio Alessandri was 22, Technogym is considered to be the "Best Company to Work for in Italy" and one of the "10 Best Companies to Work for in Europe," according to Fortune magazine. With 700 employees in the Gambettola, Italy, headquarters, the fitness equipment company has estimated 2004 revenues of $291 million and operating profits of $32 million. Fortune noted that a direct personal relationship with employees is the key to Alessandri's management style. A year ago Technogym unveiled its "Vision 2006" statement, a 26-page booklet developed with input from all its employees, and Alessandri signed each employee's copy on the page on which he promised to abide by the values put forward in the document, including intellectual humility, optimism and teamwork. Alessandri said in the Fortune article: "My personal objective is to create a corporate culture that can be a model of an innovative company and a point of reference for this country and outside of this country. The entrepreneur's biggest challenge is to include everyone in his dream and make them feel part of the process of making this dream come true. We want a company where people come to work feeling that it's their hobby."

>> Everlast Worldwide has signed a new licensing agreement with Sparta Ltd., a footwear, apparel and sporting goods supplier based in St. Petersburg, Russia. Currently the Everlast licensee of apparel, retail boxing and exercise equipment, Sparta will produce men's, women's and children's footwear for Everlast. The new line will be distributed throughout the Russian Federation and sold through sporting goods outlets and better department stores.

>> The Nautilus Group has released its Winter 2005 Home Health and Fitness Catalog showcasing its four leading product brands -- Nautilus, Bowflex, Stairmaster and Schwinn. The objective of the full-color, 52-page catalog is to raise awareness about fitness to help grow the overall fitness equipment category while supporting the company's already-established direct, retail and commercial business, a company spokesperson said. In addition to treadmills, bikes, ellipticals and strength systems, the catalog also features fitness accessories, including Pilates products for conditioning and balance, exercise benches, apparel, accessories, training materials, Champion Nutrition products, and relaxation products such as massage chairs and saunas. The company expects nearly half of the catalog buying to be done through its website, www.nautiluscatalog.com.

>> Six-time Tour de France champion Lance Armstrong is joining "the club" that already boasts Magic Johnson, Andre Agassi and Shaquille O'Neal -- partnering with 24 Hour Fitness to create signature Lance Armstrong Sport Clubs. The first full-service club will debut in Armstrong's hometown of Austin, Texas, in summer 2005 with numerous amenities including large indoor Lance Armstrong cycling rooms. 24 Hour Fitness will also become a sponsor of Armstrong's Discovery Channel Pro Cycling Team, and be involved with the Lance Armstrong Foundation. Armstrong will be featured in 24 Hour Fitness' advertising campaigns.

>> adidas America is suing trendy retailer Abercrombie & Fitch for using its signature --and trademarked -- three-stripe logo on a casual wear apparel line. Featured in an online Christmas catalog, the offending merchandise includes several pairs of pants and a zip-up sweat shirt, all adorned with three parallel stripes running down the sleeve and pant leg, according to a lawsuit filed in U.S. District Court in Portland. adidas asked the court to order the impoundment and destruction of all the apparel, as well as any bags, boxes, labels, tags or promotional material that accompanied the merchandise. This isn't the first time Abercrombie & Fitch has run into infringement claims with adidas, according to court documents. But both times -- in 1996 and 2002 -- the companies settled things amicably between themselves and Abercrombie & Fitch pulled the merchandise. The third time around adidas decided to file suit. Adi Dassler, the German cobbler who founded Adidas, registered the three stripes in 1949. The company argues that the design has become synonymous with the German sportswear giant.

>> The Super Show may be showing up on a TV station near you. SGMA will be conducting a TV Satellite Media Tour on Jan. 18 during the Florida trade show to promote the sporting goods industry, enabling local TV stations across the country to access two-to four-minute interviews of the products featured at the show. The tour will include 15 to 20 TV news interviews and feature six to seven products per segment. To date 18 local TV stations have signed on and another 25 to 30 are expected to accept the feed from the show floor. The interviews will be shown on local morning newscasts on ABC, CBS, NBC, FOX, and Warner Brothers affiliates. But getting products featured comes for a price -- $7,500. For more information, contact SGMA's Mike May at 561-840-1165 or mmsgma@aol.com.

>> In the span of three days, Life Time Fitness announced the planned opening of two new fitness facilities in Texas and one in Minnesota, bringing its total to 43 locations nationally. The Texas fitness centers will be in Austin and Cinco Ranch and each will be 109,000 square feet. The company's 15th center in Minnesota will be in Chanhassen and will open this summer.

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