In a quiet deal sealed barely a week ago, Life Fitness has sold its 17 West Coast Omni Fitness stores to Busy Body of California.
The deal effectively divides the United States into three specialty retail regions, each nearly dominated by one chain -- Busy Body in the West with 39 stores, Omni in the East with its 43 remaining stores, and the country's now largest specialty fitness retailer, The Fitness Experience in the Midwestern states with 55 stores.
Overnight, the new Busy Body stores -- 10 in Washington, six in California and one in Alaska -- began answering their phones "Busy Body Fitness," with employees reassuring callers it was the same store with the same equipment. SNEWS sources noted at least one Omni store in the Seattle, Wash., area was closed on Oct. 1 "for inventory," according to signs on the door. The deal closed Sept. 30 with the change effective Oct. 1 for an undisclosed amount called "fair" by both parties.
"It's something we've been interested in for a long time," Kenton Van Harten, Busy Body president and COO, told SNEWS. "It just made a lot of sense to everybody. They were exploring some ways to focus on the East Coast, and our goal has been to be the dominant dealer on the West Coast."
The Omni stores sold were mostly part of the former Seattle, Wash.-based, Exercise Equipment Company legacy and had always been very separated both in geography and area needs from their current Omni counterparts in Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey, New York and Pennsylvania. The six Ohio Omni stores had been sold last fall to The Fitness Experience after that chain merged with Exercare.
"It was probably much easier to fight the war on a single front than on a bicoastal basis," Life Fitness President Kevin Grodzki told SNEWS, who admitted what everybody knows -- that the stores overall have not been performing as the company thought they should. In June, President Rick Griner left the company to be replaced by Chris Clawson, previously vice president of sales and marketing for the Life Fitness consumer division, who was named Omni's "general manager." At that time, Life Fitness said it would more closely integrate the retailer, making it more of a showcase for Life products and brands. Life Fitness parent Brunswick bought the chain in March 2001.
Grodzki said that Life Fitness now can move ahead with improvement programs with a focus on one region and stressed it does not have a for-sale sign up on any of the other stores: "We're standing by those left." He added that if an operator that "meets our criteria" approached the company, they'd talk, but he sees none at this time.
One interesting result is that the new Northern California Busy Body stores will be the only ones in the country to carry both Life Fitness AND Precor. At this time, the selection of other brands will not change, both Van Harten and Grodzki said. Grodzki said, however, that the agreement signed required the stores sold keep Life Fitness in their lines for "a long long time."
Busy Body, based in Southern California, adds the Omni stores in three states to its stores in Arizona, Colorado and Southern California. The company, Fitness Holdings International with Brian McDermott as chairman of the board and CEO, purchased 16 of the former Busy Body stores in the former chain's 2001 bankruptcy -- as well as the rights to the name in the Western region -- then closed two and added seven stores. Its 39th store will open in Denver the first of November. Van Harten said the company plans to not spread itself too thin and to remain in the west.
"We want to make sure we are doing a world-class job on the West Coast," he added.
SNEWS View: OK, so everybody knew that Brunswick and Life Fitness weren't all too happy with the way Omni was going, and a sale is not a complete surprise. But this sale is interesting in the way it creates three geographically dominant chains -- not to imply with that statement that small local or sub-regional chains and independents are not doing a good or even great job. They are. Including players such as Fitness Resource in the southeastern states and the smattering of locally owned mom-and-pops. But this dominating trio with 137 stores will make it all that much harder for a small shop to get the brands it needs or wants to best attract customers, and could make opening a new shop pretty difficult indeed. But the regional division also makes a heck of a lot of sense -- tastes, needs, expectations and even weather differ pretty drastically from west to Midwest to east, and each chain can now keep the closest eye on its own area to best satisfy the customers there.