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Mean Percent Change
Total revenue: $1.64 million 5.2%
Total membership/dues revenue: $1.09 million 4.0%
Total non-dues revenue: $0.54 million 7.8%
Same-store total revenue: $1.73 million 5.3%
Same-store membership/dues revenue: $1.14 million 4.4%
Same-store non-dues revenue: $0.59 million 6.9%
Total membership accounts: 3,073 -1.5%
Same-store total membership accounts: 3,067 0.4%
EBITDAR $0.47 million 5.3%
Note: Data reflects information from 18 leading U.S. health and sport club companies, representing
194 facilities. Same-store revenue data reflects clubs that have been in operation for at least two
years. Participating companies reported owning/managing an average of 11 facilities (same-store
count average of 8 facilities). EBITDAR: Earnings before interest, taxes, depreciation, amortization,
and rent.
| News & Know How | News
IHRSA Clubs Report Strong
Third Quarter 24 Hour Fitness
Arecent IHRSA survey of
18 leading U.S. health and
sports club companies revealed
that commercial clubs’ financial
performance improved significantly
for the third quarter of 2007 (which
ended September 30), compared
with the same period in 2006.
These mid-sized companies, representing a total of 194 facilities,
grew their total revenue by an average of 18.1%, to $16.6 million,
according to the survey, which was conducted for IHRSA by Industry
Insights, Inc. The participating companies also reported improved
same-store revenue—by an average of 5.4%, to $7 million—for clubs
that have been in operation for at least two years.
On a per-club basis, individual units increased their revenue by an
average of 5.2%, to $1.6 million. Nearly 70% of the total revenue was
fueled by membership dues revenue, which totaled $1.1 million and
grew 4% since the third quarter of 2006.
“We’re pleased to report that these leading health clubs consistently
grew dues and nondues revenue, while holding gross margins at 29%
for the third quarter,” notes Joe Moore, IHRSA’s president and CEO.
Looking forward, Katie Rollauer, the association’s senior manager
of research, observes, “This growth pattern has been evident during
all three quarters in 2007, and we anticipate a positive outlook for the
year-end due to a historical increase in membership sales that typically
occurs late in the fourth quarter.”
The survey also found that the average earnings before interest,
taxes, depreciation, amortization, and rent (EBITDAR) improved by
5.3%, to $470,000. As a percentage of total revenue, EBITDAR was
29% of revenue. —|
3RD QUARTER 2007
(FROM Q3-2006 TO Q3-2007 PER CLUB ANALYSIS)
Makes ‘Strategic
Adjustments’
Five executives, including
founder, leave the company
> In January, Mark Mastrov, the founder of
24 Hour Fitness Worldwide, Inc., resigned as the
chairman of the San Ramon, California-based
chain, the first step in a major management
realignment. Then, on the last day of the
month, the official date of Mastrov’s departure,
the company announced that four other
executives were leaving. They are: Tony Bakos,
vice president and general counsel; Mike
Feinman, vice president; Don Harbich, vice
president; and Adam Loew, vice president
of new club development.
In a statement about the latter changes, the
company said: “24 Hour Fitness is dedicated to
growing our business and to providing worldclass
service to our customers. As part of this
ongoing commitment, we regularly evaluate
our resources and organizational structure
and make strategic adjustments where
necessary. Our recent personnel changes
are consistent with these objectives… ”
Earlier, the company had explained,
simply, that Mastrov was leaving to “pursue
other interests.”
24 Hour Fitness, started by Mastrov in
1983, now has more than 400 clubs and
3 million members worldwide. In 2005, the
company was sold to Forstmann Little
and Co., a private investment firm, for
$1.6 billion, and, the following year, Mastrov
ceded his CEO position to Carl C. Liebert III,
a former executive at The Home Depot.
What Feinman would be doing in the
future soon became clear: Last month,
Gold’s Gym International, Inc. (GGI),
announced that it had hired him to serve
as its chief operating officer (COO), with
responsibility for its 62 corporate-owned
facilities. “We’ve known Mike for several
years now and are excited to have him on
board,” says David Schnabel, the CEO of
GGI. “We’ve admired his accomplishments
from afar, and look forward to having his
expertise in-house.” —|
www.ihrsa.org | MARCH 2008 | Club Business International 39