Thursday, October 30, 2008

Economy Hits Fitness Center

“The walls of a 112,000-square-foot Life Time Fitness center are rising along Houston Levee in Collierville -- just in time for the credit crunch and an economic slowdown. And now the scheduled spring 2009 opening of the two-story Collierville facility at 3470 Houston Levee north of Poplar -- the company's first in Tennessee -- is under review. Construction is moving along on the 120,000-square-foot Life Time Fitness facility on Houston Levee. It seems consumers are buying fewer massages, and those who pay for memberships and fail to use them are canceling more quickly, company officials said Thursday in a conference call with Wall Street analysts. Because of the challenging financial and economic times, Life Time Fitness, a New York Stock Exchange company based in Chanhassen, Minn., is throttling back its expansion plans for a chain that will have 81 locations in 17 states by year's end. From 11 openings this year, the firm is considering six in 2009 and six in 2010. ‘Internally, we're simply looking at this as taking our foot off the gas slightly,’ Michael Robinson, chief financial officer, told analysts. ‘We've got a number of projects in various stages and we're going to logically work through each of them,’ Jason Thunstrom, a company spokesman, said Friday. Thunstrom said the company is within a week or so of deciding how to proceed. And it has the advantage of having its own construction company, allowing it to start and stop projects at will, he said. Even with the credit crunch -- the company may accelerate expansion plans if it eases -- and the slowing economy, Life Time Fitness has posted double-digit revenue and profit increases this year. Company founder, chairman and chief executive Bahram Akradi told analysts that the key during recessions is making it easy for customers to join and applying more aggressive marketing. Connecting with members comes next. For consumers, Life Time Fitness will be hungry for business in an area that already includes Prairie Life Fitness, the YMCA, DAC at the Collierville Community Center and the Germantown Athletic Club, among others. ‘Everybody will be on their 'A' game," said Jennifer Mahlendorf, director of sales and marketing for Prairie Life in Omaha, Neb.”

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