Smart Business Magazine, Sept 2012

10 Smart Business Florida September 2012 When Jim Snow became president of the Irving Texasbased Golds Gym International three years ago he stepped into a tough challenge The recession was in full swing and retailers were closing left and right leaving behind a glut of cheap readily available retail space This void presented a ripe opportunity for operators of tiny low overhead gyms offering super low priced monthly memberships It was pretty clear when I arrived I started holding meetings with all of my stakeholders to learn about the business environment and this was one of the key threats to the business that everybody was searching for an answer to says Snow who took the helm at Golds Gym International in 2009 In its many years of existence Golds has carved out its territory as an operator and franchisor of full service gyms large facilities covering 40000 to 60000 square feet that offer a wide array of fitness services and amenities The company which has 700 gyms and more than 3 million members worldwide has always fared well in the full service segment of the fitness market In more recent times GGI has also begun operating and franchising fitness only gyms midsize facilities covering 20000 to 25000 square feet that offer fewer services and amenities than the full size gyms at somewhat lower membership rates These fitness only facilities were the ones that were feeling the pinch from the rise of the discount microgyms when Snow came aboard The discount operators were opening scads of smaller gyms 8000 to 15000 square feet in areas near GGIs fitness only gyms And because the microgyms operate on lower overhead and can therefore afford to offer super low membership rates they began luring Golds customers away In those markets where they built the discount gyms there was a lot of attrition Snow says We started feeling the effects of the low cost gyms on our product Sometimes it was as much as 25 30 percent of the volume HEAVY LIFTING JIM SNOW TOOK OVER GOLDS GYM INTERNATIONAL WHILE A RASH OF DISCOUNT MICROGYM OPERATORS WERE CHIPPING AWAY AT HIS COMPANYS MARKET SHARE A HOUSEHOLD NAME IN THE FITNESS INDUSTRY IT HADNT CHANGED ITS OFFERINGS MUCH SINCE ITS BIRTH IN VENICE BEACH CALIF IN 1965 SNOWS COUNTEROFFENSIVE LED TO THE CREATION OF A NEW TYPE OF GYM AIMED AT RECLAIMING THE GROUND GGI LOST B Y P E T E F E H R E N B A C H p f e h r e n b a c h @ s b n o n l i n e c o m Feature Golds Gym International