Thursday, July 3, 2008

Aiming to Sell the World on Fitness

“Technogym, the world’s second-largest maker of exercise equipment, has a strategy for fighting the declining dollar: promote exercise as a necessary luxury. On the eve of the European Central Bank’s expected increase in interest rates, a move likely to drive the value of the dollar still lower, Technogym is taking a page from the Italian fashion industry, focusing on reputation, cachet and flair, celebrating customers like Sylvester Stallone, Madonna and George Clooney. ‘Fashion is looking good outside; wellness is feeling good inside. It’s the new frontier of luxury,’ said Nerio Alessandri, the 46-year-old who owns and runs Technogym, second only in size to America-based Life Fitness, and exclusive supplier of 1,000 exercise machines on the grounds of the 2008 Olympics. The United States is the world’s biggest fitness market. But in case growth in the American market slows — as it seems to be with every other consumer good and service — Mr. Alessandri has expanded the company’s reach in recent years to Dubai, Russia and China, countries where few people join health clubs and fewer still have home equipment. In addition to mining such growth markets, Technogym’s other strategy for surviving an American (or trans-Atlantic) downturn is containing costs. ‘Because of the dollar, we spend an enormous amount of time on cost issues,’ said Timothy O’Connell, the company’s marketing director. But several American-based competitors say that the weak dollar is giving them an advantage. ‘Our products always represent a great value to purchasers,’ said John E. Stransky, president of Life Fitness, a unit of Brunswick Corporation. ‘A weaker dollar makes them an even more attractive purchase at this time.’ Mr. Alessandri agrees that the weak dollar punishes Technogym, given that the dollar is the currency of the global fitness market, with the exception of Europe. ‘The dollar penalizes us a lot,’ he said. ‘It’s also an opportunity, a stimulus to implement efficiencies.’”

No comments: