By Therese Iknoian Â
For the complete story, see GearTrendsÂ® Fitness 2005, p. 12, "Passion to Profit"
The timeline of recent retail birth, date, mergers and acquisitions
2001 â€“ Busy Body (Texas) goes bankrupt
2001 â€“ Remaining Busy Body stores auctioned off to:
Fitness Warehouse (5), Hancock Park (17), Leisure Fitness (6), Total Fitness (4), The Fitness Experience (3), Gyms to Go (5)
2001 â€“ Life Fitness buys Omni Fitness, the largest fitness retailer at that time
2002 â€“ The Fitness Experience buys Exercare
2003 â€“ Hancock Park a.k.a. Busy Body Home Fitness buys 17 Omni Fitness stores (Western region)
2003 â€“ Hancock Park buys Fitness Warehouse (San Diego, Calif.)
2004 â€“ Hancock Park buys All About Fitness (Denver), Exercise Equipment of Nevada (Reno) and Advanced Exercise Equipment (Denver)
2004 â€“ Factory Fitness (Indiana) liquidates
2004 â€“ Fitness Gallery (Arizona) goes bankrupt
2004 â€“ Scott Egbert buys Body-Fit (Utah)
2004 â€“ Hancock Park buys 46 Omni Fitness stores (eastern region) from Life Fitness
2005 â€“ Scott Egbert buys Fitness Showcase WA
2005 â€“ The Fitness Experience goes bankrupt
2005 â€“ Scott Egbert buys 10 stores in TFE auction
2005 â€“ 2nd Wind acquires Wisconsin TFE stores from Egbert
2005 â€“ 2nd Wind buys Fitness Factory (Wisconsin)
2005 -- Hancock Park buys The Fitness Store-LA
2005 â€“ TFC (Ohio) Fitness shuts down
2005 -- Hancock Park buys LA Gym, won't change name to Busy Body
(For a similar timeline for manufacturers, see full story in the GearTrendsÂ® Fitness 2005 issue, page 12.)
Fitness Consolidation Accelerated
Accelerated pace in fitness? According to at least one observer, the rate of mergers, acquisitions and consolidation is going faster in fitness than in other sporting goods areas. Tom Cove, president of the Sporting Goods Manufacturers Association, said there has been what he sees as "serious consolidation" on the retailer side.
"But the jury's still out on that one," he added. "The profit-value equation is not always clear."
The manufacturing side is also moving more quickly: "It's accelerated in fitness," Cove said. "You have some serious big players in the marketâ€¦. It's been fueled by a couple of visionary people."
He named the likes of companies like Russell, Nike, Reebok, Amer Sports and K2 as some that are heating up the consolidation race.
Keeping the company culture to survive. One investment company, Bain Capital, that has studied cultural integration as a key success factor in consolidations lays out seven guidelines:
- Follow the Money: Focus integration on the few, critical issues that drive the value
- You are most vulnerable between announcement and closing: Competitors target your best customers and employees when you can not easily respond â€“ protect them quickly
- Focus most of the organization on running the business, not integration: â€œIf everybody does both, nobody does eitherâ€
- Resolve â€œPower and Peopleâ€ issues quickly: Get the senior team in place soon after the merger announcement
- Create a structured integration process, but speed matters: Use simple process tools
- Win the â€œHearts and Mindsâ€ of both companies' employees: Communicate a passionate vision of the future
In addition, Bain's research shows that integration factors are most important for success, with 83 percent of respondents in a survey saying it is THE most important issue and must be addressed early and actively.
Don't miss the full story, "Passion to Profit," in the GearTrendsÂ® Fitness 2005 issue. To download the full issue, go to www.geartrends.com/magazines.