Fitness: Did you hear?...

NRF study reports executive optimism for 2004, German retailers struggled in 2003, Amer Group reorganizes management, U.K.'s Peak Fitness closes three sites, plus much more...
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>> Retail executives are expressing optimism for the coming year, according to a January survey by the National Retail Federation (NRF). The latest findings from the NRF Executive Opinion Survey, a monthly index by the NRF, shows a "renewed sense optimism and hope." The Retail Sector Performance Index (RSPI) reached a new record in January with a reading of 65 percent, more than double the same period a year ago (31.7 percent) and already 9.4 percentage points above December's reading (56.6 percent). The RSPI measures retail executives' evaluations of monthly sales, customer traffic, average transaction per customer, employment, inventories and a six-month-ahead sales outlook expectation. But it seems consumers may have the same optimism about the economy. The Conference Board's gauge of confidence in the overall economy rose to 96.8 this month from December's revised reading of 91.7 -- an 18-month high. Plus, consumer sentiment rose to 80, up from last month's 74.3; while sentiment rose, it was held down because of continued worries over the labor market, including the increase in U.S. firms going overseas.

>> GERMANY -- Retailers in Germany struggled through 2003 just as they did in North America, according to the group called FEDAS (European Association of Sporting Goods Retailers) in an announcement last week. Sales in that country were down last year over 2002, dropping to Euro 7.1 billion from 2002's Euro 7.5 billion (with the constantly changing dollar in the last few months, we won't translate this for you since it would be misleading). That compares to slight growth overall in the European market of about 2 percent to Euro 36.25 billion.

>> Precor-parent Amer Group Plc has reorganized its management structure. As of Jan. 28, the group's executive team will include Roger Talermo, president and CEO; Pekka Paalanne, senior vice president and CFO; Max Alfthan, senior vice president, corporate communications; and Kari Kauniskangas, senior vice president, sales and distribution. Paalanne will also act as deputy to the president and CEO. The Amer Sports executive Board, which includes the executive team and the presidents of the group's businesses working together to ensure that the Amer Sports strategy is consistent across all companies, will include the Amer Sports executive board with Talermo (chairman), Paalanne, Alfthan, Kauniskangas, Paul Byrne (representing Fitness Equipment, Precor), Dan Colliander (Sports Instruments, Suunto), Chris Considine (Team Sports, Wilson), Steve Millea (Golf & Racquet Sports, Wilson) and Michael Schineis (Winter Sports, Atomic). Kauniskangas, now a member of the executive team, was president of Amer Sports Europe in Munich. Kauniskangas will re-locate to the corporate headquarters in Helsinki, Finland.

>> UNITED KINGDOM -- Peak Fitness has gone into administration and closed three sites in Northern Ireland, Glasgow and Newcastle. Consultant Rod Hill said the shareholders and the bank had decided not to refinance the business, which has a high level of outstanding debt. The administrators, BDO Stoy Hayward, have closed three loss-making sites, which leaves 12 clubs remaining. Meanwhile, the company's shareholders and directors have established a trust fund to refund those members who have paid in advance.

>> GERMANY -- Even the German market isn't immune to cheesy infomercials. One of the first things SNEWS saw on TV in Germany was a splashy segment for something called "Instant Abs," with the German-English tagline of "Training mit ein Fun Factor." It showed female and male gorgeous bodies sitting on a chair-like thing while sorta pivoting and swinging from the mid-section to supposedly work the abs, telling listeners that they could "train while comfortably sitting." Hmm, guess the copywriters neglected to add that they could also wreck their backs while comfortably sitting, too. Wanna check out the disaster? www.vector-versand.de

>> New Balance Athletic Shoe Inc. will become the exclusive sponsor of The Armory in upper Manhattan, becoming its first-ever title sponsor. As a result, the building will be renamed the New Balance Track & Field Center at the Armory. Through the sponsorship, New Balance will have significant visibility within the center via logo placement, signage and other company/brand displays. In addition, New Balance will maintain its sponsorship of the New Balance Games, held annually in January, and will assume title sponsorship of the New Balance Collegiate Invitational (formerly The Armory Collegiate Invitational), the largest indoor college track and field meet in the country, which features 100 teams from 23 nations.

>> GERMANY -- And you thought the delightful little German-originated Gummi bears were just sweet treats? Oh, so wrong. SNEWS found "Hyper Gum" at the ispo trade show, stoked with L-Carnitine (about 10 milligrams per little bear, we were told). "Get the Energy," the promotional flier says in English, adding in Germany that they will pump up your energy and are good for you, too. www.hypergum.com

>> The New York Health & Racquet Club will expand its business to 10 clubs by the end of 2004. The exclusive and luxurious chain has acquired a gym in Greatneck, Long Island, and will open a brand new facility downtown in the East Village area of Cooper Square by the fourth quarter of 2004. The expansion process began in 2002 with the opening of the chain's flagship 40,000-square-foot property in Chelsea. The club's goal is to expand further into Long Island, as well as into Westchester, where it operates a beach and tennis club, and into Connecticut. The chain has been a New York fitness institution for more than 30 years.

>> UNITED KINGDOM -- Construction is underway on a David Lloyd Leisure Club in Worthing, with the opening planned for later this year. Built on a Greenfield site in the Durrington area of Worthing, the site is located close to commercial and residential populations. The 7,500-square-meter (80,000-square-foot) facility will include five indoor and two outdoor tennis courts, a 25 m indoor pool, a 20 m outdoor pool, a fitness hall and two aerobics studios. The club will also have a multisports hall with facilities for netball, badminton, 5-a-side football and basketball, as well as spa facilities.

>> Bahamas-based RND Holdings is looking for a buyer for Caribbean Health and Fitness -- operator of Gold’s Gym in Nassau -- and its 30 percent interest in Cayman Health and Fitness -- operator of Gold's Gym in the Cayman Islands. The gyms have been running for 10 years and RND Chairman Jerome Fitzgerald told The Nassau Guardian that the health and fitness arm of the business would be better suited to a single operator. The company plans to focus on its core business of ticketing and commercial real estate.

>> Remember the ab-toning belts? Well, they're back. Or at least one is -- one that says it's different. The Slendertone Flex, sold and marketed for years in Europe, is the first abdominal training belt to be cleared for sale in the United States by the U.S. Food and Drug Administration (FDA). The FDA has approved the following claims for its use: improving abdominal muscle tone, strengthening abdominal muscles and developing a firmer abdomen. It utilizes medical-grade electro muscle stimulation (EMS) technology. When the FDA debunked claims by and filed charges against several other ab-toning belts, which are now off the market, scientists who worked with Slendertone helped get its approval. In an eight-week study of the Slendertone, done by John Porcari, University of Wisconsin-La Crosse, researchers found an average increase in isometric abdominal strength of 49 percent; abdominal endurance increased 72 percent (measured by a sit-up test); and waist girth decreased by more than one inch, although there was no significant weight loss. The Slendertone sets itself apart by not claiming weight loss. The Slendertone is marketed by Compex Technologies (Nasdaq: CMPX), a company that manufactures, designs and markets electromedical products used for fitness and sports training. SNEWS View: We still aren't convinced, especially since we've tested the Slendertone and found the electrical stimulation uncomfortable. We'd prefer just to do some crunches for five minutes. Nevertheless, some want it easier than actually, you know, exercising, and if this works, then well more power to 'em.

>> Sports and fitness won a huge victory in the Senate this month when it passed by a vote of 65 to 28, the Fiscal Year 2004 omnibus appropriations bill incorporating seven spending bills Congress did not pass before adjournment last year. The bill now goes to President Bush for his signature, and includes the so-called PEP act -- $70 million for the Carol M. White Physical Education Program, up from $50 million last year. Now in its fourth year, this competitive grant program provides funds to local educational agencies and community-based organizations to help cover the cost of initiating, expanding and improving physical education programs, specifically through training or hiring instructors or buying equipment, including exercise equipment, accessories and programs to include them. "This is great news for us," said Anne Flannery, president of P.E.4LIFE (www.pe4life.org). "When it comes to our children, quality daily physical education is a critical part of elementary and secondary education. The bill also includes two grants to help fund the growth of the P.E.4LIFE Institute: One in Naperville, Ill., for $200,000 to help grow the P.E.4LIFE Institute in that community, and another for $250,000 in New Haven, Conn., to help start a new institute serving the northeast. "The institute's goal is to train more physical education teachers on proven methods of innovative physical education programs," Flannery said, "and this funding will go a long way toward helping us reach more physical education professionals throughout the country." P.E.4LIFE is a non-profit, advocacy organization dedicated to the delivery of health, fitness and sports activities to all students, every day in school. Daily physical education provides a solution to reduce children's exposure to chronic diseases, while fostering lifelong fitness habits.

>> UNITED KINGDOM -- More than a third of health and fitness clubs in the U.K. are losing money, according to research by Plimsoll. A study of the top 528 companies in the U.K. industry found that half make less than a 2 percent return on investment. Only 62 companies in the latest Plimsoll Portfolio Analysis -- Health and Fitness Centres, delivered a 10 percent return on investment in 2003, said senior analyst David Pattison. "This is the level of profitability required to provide a good return to shareholders, pay for investment and help to ensure company longevity," he said. "The ability to make profit is becoming the exception, not the norm."

>> Nike has signed as an official sponsor and licensee of the 2006 and 2008 U.S. Olympic and Paralympic Teams. The partnership with Nike will officially begin in January 2005. The agreement designates Nike as an official outfitter, providing 2006 and 2008 U.S. Olympic and Paralympic athletes with the podium uniform worn during medals ceremonies. In addition, Nike will outfit athletes with athletic wear and performance apparel for approximately half the National Governing Bodies including existing partnerships with USA Track & Field, U.S. Soccer and U.S. Speedskating.

>> Analysts at eMarketer list the top trends that they say will have a significant impact on business and society. The list includes online advertising, online content, e-commerce and wireless technology. Internet advertising practitioners say the media attention and industry buzz directed at paid search may convince traditional advertisers and agencies to look at online advertising as a direct response medium. The list of top trends also includes digital music, gaming, portals, Latin America, online content, interactive banking, wireless, and e-commerce. Click here to read the story.

>> adidas-Salomon released preliminary figures of its 2003 sales which were Euro 6.27 billion, a 5 percent improvement in currency-neutral terms. Although in Euros, sales were down 4 percent compared to 2002's Euro 6.52 billion. Group gross margin increased 1.6 percent from 43.2 percent in 2002 to 44.9 percent in 2003. This is the highest level ever for the company and reflects the impact of increased adidas retail activities, an improving product mix and a stronger Euro, according to the company. Operating expenses in 2003 were reduced by 1 percent to Euro 2.32 billion, while group operating profit increased 3 percent to Euro 490 million versus Euro 477 million in 2002 and the operating margin grew 0.5 percentage points from 7.3 percent in 2002 to 7.8 percent in 2003. Net income for the group in 2003 increased by 14 percent from Euro 229 million in 2002 to a record Euro 260 million. Gross margin expansion and lower operating expenses were drivers of this improvement. "Our excellent 2003 performance reflects our groups ongoing ability to deliver targeted results even in the face of challenging market conditions. Despite weakness in America and major pressure on group sales as a result of currency developments, we achieved record earnings," said CEO Herbert Hainer. "This year, we will stabilize our business in North America, grow group sales by 3 percent to 5 percent on a currency-neutral basis and deliver net income growth of at least 10 percent." Final full-year results will be released on March 10.

>> Reebok International Ltd.'s net income for the fourth quarter ended Dec. 31, 2003, was $28 million, or $.44 per diluted share, an earnings per share increase of 63 percent when compared to 2002's $16 million. Net sales for all of 2003 were $3.485 billion, an increase of 11 percent from 2002's net sales of $3.128 billion. Worldwide sales for the Reebok Brand in 2003 were $2.936 billion increasing 13 percent from 2002's $2.592 billion. In the United States, sales for the Reebok Brand increased 13 percent in the fourth quarter of 2003 as compared with 2002's fourth quarter. Reebok's U.S. footwear sales in the fourth quarter of 2003 were $228 million, an increase of 17 percent when compared with 2002's fourth quarter U.S. footwear sales of $195 million. "The initial success of our Premier Series running products has been very encouraging, as the running category is the largest single category of performance footwear around the world," said Paul Fireman, chairman and CEO of Reebok. "Sales of performance footwear products increased by 16 percent for the year, led by a 15 percent increase in the running category and a 16 percent increase in the men's training category." The company's international sales of Reebok Branded products amounted to $316 million in the quarter, an increase of 10 percent over 2002's fourth quarter sales. The company reported that its total worldwide backlog of open customer orders scheduled for delivery from January 2004 through June 2004 for the Reebok Brand increased 13 percent from the prior year's comparable amount. On a constant dollar basis, overall backlog for the Reebok Brand increased 6 percent.

>> And you thought the cost of a cup of joe didn't mean anything? HAH. The Economist magazine will now use the price of a tall latte from Starbucks around the world to compare foreign currencies to the dollar, as reported by The Seattle (Wash.) Times. The magazine used to compare values using the price of -- guess what? -- a McDonald's Big Mac.

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