Tuesday, July 14, 2009

No-Frills Fitness Club Pumps Up In Lean Times

At the moment Planet Fitness seems to be a lot healthier than Planet Real Estate. The company’s revenue doubled to $4 million in 2008 from $2 million in 2007. Bates, a Vietnam era Navy SEAL veteran who runs the day-to-day Planet Fitness operations, said he expects revenue to climb another 30 to 40 percent in 2009. Nationwide, since Planet Fitness began franchising in 2003, 245 gyms have opened in 29 states. The average Planet Fitness has about 6,000 members. Planet Fitness does not have any of the special services common in upscale gyms. Gone are the aerobics classes, yoga studio, personal trainers and spin classes. Bates said that 75 to 80 percent of gym members use just cardio equipment and weights, but that typically 80 percent of staff is taken up with extra classes and services. ‘The cost of your dues is subsidizing the sales and staff and overhead and salaries to support amenities that 20 percent of the members use,’ Bates said. Thus far the recession has had a mixed impact on the fitness club industry. Many clubs are reporting increased activity as out-of-work members have more time to exercise. But overall membership is down 4.2 percent from 2007, according to Kara Thompson, spokeswoman for International Health, Racquet & Sportsclub Association. ‘Planet Fitness has a very simple business model that has been incredibly successful, and should do even better in tough economic times,’ said Thompson. Bates said Planet Fitness has been “a beneficiary of people migrating down” to more affordable gyms. “It’s a discretionary expense for people, and we’re cheaper,” said Bates.”


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