“Life Fitness Inc. has proposed a two-story, 91,000 square-foot gym. If approved by the city, it would have amenities including a cafe, registered dietician and salon services. A club of that size would rival all but two of the region's gyms; the California Family Fitness operations in Folsom and Natomas. Life Time would offer more in terms of spa services, including hair, nails and skin care treatments, but this smaller-than-normal model would lack a climbing wall. Life Time Fitness is in escrow to buy 11.7 acres at Roseville Parkway and Pleasant Grove Boulevard from father-and-son developers Peter and Paul Bollinger, contingent upon project approval. Life Time's gym would sit between a California Family Fitness in Roseville and another a few miles away in Rocklin. The company is willing to invest big, even as businesses and consumers are spending less. Life Time spent an average of $31 million for each of the 10 clubs it opened last year, spokesman Jason Thunstrom said. Despite the credit crunch stifling many companies, Life Time can fund its expansion the company has added nine of 11 new clubs scheduled to open this year by securing credit and leveraging operating cash flow, Thunstrom said. Russ Kuhn, co-founder and one of the owners of California Family Fitness, is ‘real familiar’ with Life Time, which he called ‘a very well-run outfit,’ but was surprised the company is making its move in this saturated market. ‘It's a good location, exposure-wise,’ Kuhn said. ‘I just think there's way too much competition for them to try to break into this market, especially now.’ Given the economy, it is risky ‘to break into any new market right now,’ he said. At least one analyst who follows Life Time said in a report that he was concerned what the economic downturn would mean for future gym enrollment. It's too soon to know what effect, if any, the latest economic worries will have on gym memberships. Gyms in Greater Sacramento have had mixed results as the economy has slowed over the past year. The health club industry saw U.S. consumer demand drop last year, to 41.5 million members for 2007 from 42.7 million in 2006, according to the International Health, Racquet, Sportsclub Association. Revenue continued to grow to $18.5 billion from $17.6 billion, ‘which suggests that clubs are collecting more revenue per member than ever before,’ the group reported in June. One growth segment is non-dues services, such as massage. Life Time Fitness has 9,000 to 11,000 memberships per club, with a membership covering up to an entire family. Its gyms have month-to-month memberships that cost about $50 for one person, $100 for couples and $130 for families. The company's Scottsdale, Ariz., club, which Paul Boinger toured, ‘knocks your socks off,’ he said. He wants to bring such an ‘impressive’ and "elegant" amenity to Roseville, he said.”
Sacramento Business Journal
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment