Forzani plans dozens of Fitness Source franchises with new retail/training concept

Originally discussed with SNEWS® 20 months ago, Forzani is now set to go forward with a concept for its specialty fitness stores, Fitness Source, which will include larger formats, a retail and personal training element and, eventually, several dozen stores across Canada.
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Originally discussed with SNEWS® 20 months ago, Forzani is now set to go forward with a concept for its specialty fitness stores, Fitness Source, which will include larger formats, a retail and personal training element and, eventually, several dozen stores across Canada.

Tom Quinn, president and COO of franchising for the Forzani Group, expanded for SNEWS® readers on a concept hinted at in the Calgary, Alberta, Canada-based company's quarterly earnings report in early June.

The stores, of which up to six will launch by early fall in the Montreal area, will cover 6,000 to 10,000 square feet, will include "strong visuals," in-store "brand shops," and will have showcase rooms so customers can see possible home setups. The customer could walk in, he explained, and say, "Oh, that's my basement; oh, that's my den; oh, that's my bedroom."

The store concept will also link trainers with the customer from their first interaction and will hold weekly seminars on pertinent exercise and fitness topics.

"I think we can put out a better product," said Quinn. "It's about the whole customer experience from the time they walk in the door; the environment they walk into won't be a sea of metal."

And, in a true departure from most specialty fitness shops, he said their shops will also carry a small, targeted selection of high-quality shoes and footwear from top brands.

This announcement comes on the heels of franchising the nine Fitness Source stores (www.fitnesssource.ca) to three former Fitness Source managers during the company's FY 2008 first quarter that ended April 29, 2007. Forzani (TSX: FGL) acquired the chain in early 2006. (To read a Feb. 3, 2006, SNEWS® story, "Canada's Fitness Source acquired by Forzani Group, expansion plotted," click here.)

This roll-out of the new concept, however, is only the beginning. Within the next three years, the nine current stores will evolve into the same format. Meanwhile, more franchises are planned, with 25 locations planned by the fall of 2008 and 50 to 70 planned across Canada within 48 months, Quinn said. In all cases, Forzani will follow its standard format of "cluster openings" in one area. For example, the group of new Montreal-area stores will all open on one day by about November, he said.

He also said he expected the stores and their format to make an immediate dent in the fitness market in Canada. They will also include the Forzani emphasis on staff training, he said. Forzani (www.forzani.com) is Canada's largest sporting goods retailer with 478 stores from coast to coast, including outdoor, golf and general sporting goods under several brand names.

How will it affect the competition? "I don't care," Quinn said. "There's a volume we're going after, and that's what we'll do."

The largest specialty fitness retailer in Canada now, Fitness Depot, told SNEWS® it was looking at a few changes itself, but not in direct response to Forzani's moves, which the company didn't know much about until contacted by SNEWS®. Depot will continue to focus on training its sales associates to deliver more than tech specs during sales, but rather to listen and truly qualify a customer so they get what they need, Gus Christopoulos, a Fitness Depot co-owner and regional manager, told SNEWS®.

"We're just re-evaluating our direction," said Christopoulos. He said the company has seen a lot of stores attempt the integration with personal training with various degrees of success. Fitness Depot itself is "not looking at that area. It's a difficult segment…. Time will tell."

Fitness Depot (www.fitnessdepot.ca) now has 35 stores and said it is considering adding a few more this year, Christopoulos said.

For Forzani, the reason for the giant steps is simple: Quinn said he and the Forzani company team believe the fitness area is a growing sector.

"I know it's a growth industry," he explained. "It's a natural. We have a growing population who are interested in a better quality of life…. And people aren't just looking for the right brands; they're looking for the right information to go with it."

SNEWS® View: With the growing emphasis on wellness and stemming the obesity tide, stores that get in on the front end could be quite successful as more consumers look for more than a piece of iron or steel, but rather for education and training. Yes, this has been a tough concept for specialty folks in the past, but there are a handful in the United States that have managed it well. The issue is that it does take a separate line of management or perhaps outsourcing and we think many specialty folks don't realize the entirely different line management and promotion it involves, thereby failing at it. We also have said for many years that a specialty store could become much more like a boutique shopping experience, which could include other items that those shoppers seek, such as a few clothing and footwear items. Again, this is an entirely different business that involves sizing and a different sort of buying and inventory control and is an area that most specialty owners don't have a lot of experience. Done right, we believe in it. But all of this will only succeed if the location is right, the promotion and marketing is correct and, above all, if the sales staff is trained to really listen and work with a customer -- as they are in boutiques of the world. We look forward to seeing the first Forzani stores in the fall.

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