After 22 years selling fitness equipment in the Northeast, Total Fitness Equipment shut its doors and turned off the lights at the end of the day Sunday and may not be back.
With outgoing messages on the phones playing some version of "we are closed" with a referral to the corporate number for questions, it's not entirely clear what TFE's future will be. And co-owner Gary Catania is unable to give many details.
"Basically due to the economic downturn, increase in competition and just extensive overhead with shrinking margins, we no longer could sustain a profit and we decided to shut our doors," he told SNEWS®. "It's unfortunate people aren't spending money on discretionary items."
Last summer, Total Fitness, based in South Windsor, Conn., lost its account with Precor, which at that time accounted for about two-thirds of its business. But Catania told SNEWS® the last six months have been increasingly brutal; nevertheless, he and his partner, Matt Arcata, did not lay off employees -- they closed on Sunday with 26 at nine stores in three states and in the main office -- because they felt they had made a commitment to them. He said they have all been or will be paid everything they are owed and that all standing customer orders have or will be fulfilled.
"We fought a great battle," he said. "It's a sad day for us."
Catania, however, declined to comment about what the future is or what is meant by the statement that only says they are "closed."
On Sunday, he and Arcata called every employee personally to explain what was happening, Catania told SNEWS®. Employees from each store put up signs, changed the outgoing message, locked up and didn't come back. The stores remain dark.
Apparently, at least some stores don't have signs in the windows, area passers-by have told SNEWS®, and they look as if somebody just stepped out for a few minutes. We were also told they are mostly still filled with equipment. A few stores left an outgoing message that included the number of the delivery and service provider, Beno & Associates, used by Total Fitness and others in the area. Owner George Beno told SNEWS® that he knows a lot of retailers are in trouble. With Total Fitness, Beno said, "Just, boom, it just happened." He said he had no notice but discovered the news when his phone started ringing Sunday afternoon from customers seeking information or service.
"It's a tough situation. The market is tough for people," Beno said. "An unfortunate set of circumstances in the economy and the industry led to a valuable business having to close its doors."
With trouble knocking on the door as of early last summer for TFE, several suppliers told SNEWS® they had the business on pre-payment plans for about 10 months. Several said they did not get a personal call from the owners as of Tuesday but just heard "through the industry grapevine" or from their reps.
"We had a good run with them since we brought them on as a dealer," said John Coyle, vice president, BH Fitness, who said the company still had outstanding bills of what could amount to six figures. "They paid their bills mostly on time, and I thought they were going to be OK."
Fred Hoag of Inspire Fitness also said TFE was on a pre-payment plan and had continued to buy product and pay for it up until about two weeks ago. Alan Gore of BodyCraft said his company only lost a small amount because the company kept the balance down, but he also was trying to help the retailer by supplying it with product to sell.
Court records in Connecticut checked by SNEWS® indicate no legal filings for any kind of bankruptcy had been made as of May 29. Catania declined to comment on plans.
In July 2005, Catania and Arcata became full owners of the Northern part of the Total Fitness group, buying out founder and former 90-percent owner John Valles. Rick Myers became the full owner of the Southern segment at the same time, buying out Valles' half share in that area. In December 2007, Myers and partner Kevin Lamb sold their four stores to FHI, making them Omni Fitness stores, and left the fitness industry.
"This stinks for everybody, even their competitors," Coyle said. "It's a black mark for the industry."
SNEWS® View: Even those who lost money seem to have nothing but kind words to say about the team that ran Total Fitness and the ethics with which they ran the business. That's something Catania and Arcata can be proud of. With their decades in the industry, it's difficult to say what the future holds. Certainly, a bankruptcy filing may still be a viable alternative for them, but we'll lay money that they have a legal team analyzing their assets and liabilities to help them make that decision soon. Nine stores with some amount of equipment in them can't just sit there with locked doors. It was a huge financial blow when TFE lost Precor to Omni Fitness last summer, and Precor most certainly remains the supplier that likely is owed the most by TFE -- we would venture a guess it reaches beyond a million. That isn't good for Precor since it is also, like others, suffering from the economy's downturn. We feel for the entire TFE team, including all the employees, and hope they all land on their feet. Unfortunately, we know this won't be the first of final curtains coming down in specialty retail this year.