Taiwan-based Dyaco buys controlling interest in Spirit

Spirit Fitness, now 60 percent owned by Dyaco International of Taiwan, formally unveiled its new company ownership, goals and president at The Super Show.
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Spirit Fitness, now 60 percent owned by Dyaco International of Taiwan, formally unveiled its new company ownership, goals and president at The Super Show.

In addition, the Jonesboro, Ark.-based, company -- long known for its U.S.-made treadmills -- told SNEWS® it would morph into more than just treadmills, that it would enter the sporting goods channel, and that it would manufacture more product in Asia.

"We are now a fitness company, not a treadmill company," said new President John Gibbs, who has been working with Dyaco as a partner for six years. "We're going to the next level, big time."

The deal was sealed in late October for Dyaco to buy a controlling interest in the family-owned business. Rodger and Shirley Hurt still own 40 percent of the business and continue as silent partners, and their son Jay and daughter Grace still work at Spirit.

Dyaco (www.dyaco.com) first joined with Spirit last spring when the two companies forged a partnership to introduce additional lower-cost product made overseas; four months later, Spirit stood at the Health & Fitness Business show in August in Denver with four new folding treadmills, from $900 to $1,500 suggested retail.

Dyaco was established in Taiwan in 1989 as a manufacturer and importer of home fitness equipment, a company backgrounder states; it began making motorized treadmills in 1998. With experience already in manufacturing retail and TV infomercial product, Dyaco management had decided that it needed to work with more U.S. manufacturers and attain more of a presence in North America. A mutual acquaintance brought the two companies together.

"We have a great team," Gibbs said. "I'm extremely excited."

New Spirit product should enter the market within 60-90 days, Gibbs added. In the company's booth at The Super Show was a treadmill prototype for a sporting goods product and two sample rear-drive ellipticals quite unlike the one Spirit introduced a year ago. To come are bikes and ellipticals, all as part of a full line to be developed.

"We need to position ourselves quickly to go after our share of the market," Gibbs said.

The overseas product will combine with the U.S.-made product to allow the company to reach retail prices from $700 to $6,000, said Woody Fischer, vice president of sales, and to span multiple channels.

"This marriage will help us to compete on all those levels," Fischer said. "We'll keep the existing Spirit line and bring it into the 22nd century."

For Dyaco, this will mean a recognized name and established distribution channels to get its product into the U.S. market, Gibbs said. The company had previously tried with limited success to enter the market with a brand it called Leisure Works.

For Spirit, it will mean adding upgraded looks and modern consoles to its treadmills long known for their solid motors and mechanisms that lacked a bit in the aesthetics now demanded by customers.

"Dyaco is dedicated to long-term success, to making sure we're a force in the marketplace," Gibbs said. "The market is huge, and we just want our piece."

SNEWS View: With its aggressive and rapid move last year that combined Asian manufacturing with its U.S. plant, it doesn't surprise us that the next step is into additional overseas manufacturing and a line-up of additional products for a number of reasons. One, even retailers are telling us they are impressed with the quality that Asian manufacturers can now offer -- with lower price points -- which makes fitness equipment even more interesting to their customers. Two, with more and more companies going full-line, it can be increasingly difficult to compete with just one category -- no matter how good it is. That's a bit sad, but true. We're not convinced that Spirit, which always proudly and loudly waved its red-white-and-blue-made banner, will be able to maintain U.S. manufacturing. Assembly, yes, but full manufacturing? If Dyaco can do it better and for less money, Spirit will likely move in that direction more fully. We'll see what other changes the company has made by the time this year's Health & Fitness Business show rolls around.

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