Fitness Resource committed to entry into counter-seasonal bike retail

Fitness Resource stores are settling into their new second niche of bike retail – one way to pump up counter-seasonal fitness sales and open up new revenues opportunities. Has the move paid off? SNEWS talks to President David Nees for more.
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For two-plus decades, Fitness Resource sales have slipped every spring and summer as the flowers bloomed and the temperatures warmed up in the Southeast.

“You don’t buy treadmills when it’s nice outside and you can go for a walk,” President David Nees told SNEWS® from his seat overseeing the now-19-store specialty fitness retailer in Sterling, Va.

Those seasonal revenue hiccups – combined with the recent recession – forced Nees to re-assess his business, resulting in the start of an overhaul in summer 2009: To improve warm-weather sales, seven Fitness Resource stores began selling bicycles, and now nine additional stores carry bikes, as well as cycling apparel and accessories for a total of 16 stores (www.frcycling.com).

It’s been a precisely calculated move, but Nees doesn’t hesitate noting the new product mix hasn’t done much to increase the bottom line – yet. He said he’s sticking with the plan, though, since he’s confident of results.

“I think this is going to take three to five years,” said Nees. “This is a long-term process because what we’re really talking about changing the culture of our stores.”

A necessary change

Nees told SNEWS that the recession was the extra push that prompted him to add bicycles to the mix at Fitness Resource (www.fitnessresource.com), which opened its doors in 1985.

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“The business had become extremely seasonal, and when the recession kicked in we knew we had to smooth things out,” he said.

Due to the economy, Fitness Resource had to close seven stores recently, but Nees said he was convinced he could bolster his remaining shops by adding cycling products.

“I had talked to people at other stores who had done it and were successful,” he said.

Though Nees first approached high-end bicycle brands like Trek, Specialized and Giant, he said those companies weren’t interested in doing business with him because their products were already sold in specialty bike shops in the same territory. Persistent, Nees found the Jamis bicycle company (www.jamisbikes.com), which was interested. Plus, the brand was suited to Nees’ vision of catering to a more recreational and fitness-oriented cyclist – a demographic that would fit in with his fitness equipment mix and clientele.

“We target the casual bicyclist, not really the hardcore cyclist who is going to join the local bike club and spend $200 to $300 on a bike fitting,” said Nees. “Jamis is a full-line bicycle manufacturer. They make high-quality products, just like Trek and others, but they’re also focused on being a value brand.”

Nees noted that Jamis bikes could cost hundreds of dollars less than similar bikes made by other top manufacturers.

While Nees overcame a big hurdle when he found Jamis as a partner, it was only the first of many challenges in the shifting retail business.

Learning the bike business

Once Nees brought bikes into the stores, he needed staff members who could not only sell bikes properly, but also do maintenance on them. However, he did not go out and hire a bunch of bike techs or lifelong cyclists. Instead, he turned to his warehouse manager, a former motorcycle mechanic, who delved into learning about bicycle technology. (Nees himself used to run a retail shop for motorized cycles and was a motocross racer in his younger days.)

“We increased his knowledge and then he trained others. We sort of built it up around him,” said Nees.

Then there were the other employees: It quickly became apparent that it would require an additional step to combine a fitness store with a bike shop because employees must be trained in two disciplines.

“They have to learn the fitness side of things and the bike side, so it’s a bit of double duty,” said Nees.

Perhaps even more challenging is getting fitness-oriented employees to embrace cycling. Nees worked hard with his staff to talk up the prospects from the retail stanpoint and also discussed with this employees that cycling wasn’t something really different. In fact, it was just another form of fitness.

“I’ve had to get the staff to become bicyclists, because they have to be enthusiastic about it for this to work,” he said. “This really does require changing the culture of the store.”

The staff’s attitude plays a big role in setting the mood and atmosphere, which Nees said is critical.

“People expect to go in and have the sense that they’re in a bike store,” he said. Consumers not only want to interact with salespeople who are stoked about cycling, but they also want to browse a full complement of bikes, cycling apparel and accessories.

Each Fitness Resource store (averaging 3,200 square feet) has about 70 bikes on the floor including city/urban, mountain and road types. “You can hang them on the walls and stack them, so they don’t take up too much room,” said Nees.

The stores also carry some clothing for cycling, but finding the right mix has proved to be difficult. “Half of what we have is probably correct. We’re now cleaning out the mistakes and learning what to focus on,” said Nees. “It’s a real challenge because you’re dealing with fashion and have to have the right colors, and you have to be very careful.”

One thing Nees said he has realized is that it’s probably more difficult for a fitness store to pick up cycling that it is for a bike store to bring in fitness equipment. That’s because bike shops have a special communal vibe, which is very different from the nature of fitness stores.

“Bicycling is much more communal, whether it’s the family getting together or joining a group,” said Nees. “Fitness is very different; it’s more individual, and it’s product-driven.”

Although he is prepared for the long haul, future success will depend somewhat on whether Fitness Resource can create the right vibe. Stores, he said, must be comfortable and welcoming for all customers, whether they’re shopping for an elliptical or cruising for a road bike.

“In the end, I think the bicycles are a good move,” Nees said, “but it’s a long-term project. There’s no quick fix.

--Marcus Woolf

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