Guilt Led Some to Ditch Their Luxury Club Memberships

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In speaking last week with Smaiyra Million, the new CEO of Millennium Partners Sports Club Management, which owns and operates six Sports Club/LA facilities, I asked her whether the recession had affected the luxury club market. She responded with a definite yes, but I was surprised by one of the reasons she gave for this market being affected.

The people who gave up their luxury club memberships during the recession fell into two buckets: those who had to cut back on expenses due to being laid off or getting pay cuts and those who left for perception reasons, she said. When I asked her to explain the second group, she said that some people felt guilty about still being able to afford their memberships at a luxury sports club.

“It was one of those indicators that they were still one of those ‘haves,'” she said.

Million said that some of those guilt feelings are going away, partly because the Sports Club staff focused on the value proposition rather than just the dollars. A person might join another facility for $100 less per month, but that facility might not offer everything that the Sports Club/LA facility does, so they may have to join one or more other facilities to get everything that Sports Club/LA offers under one roof, which includes basketball, squash, a spa, a hair salon and a restaurant, she said.

“What we try to explain to them is the holistic view we take of our members,” she said. “We are much more than just a gym. We feel we have an incredibly talented personal training staff. We have people who are physical therapists and can bring extra value to them. We have talented people. We build community within the club. We have innovative and master classes and expose them to things they might not be exposed to at small corner studios. We get new pieces of equipment before some of these clubs.”

Apparently, at least one investor, who Million said was a private equity firm that wanted to remain in the background, believes in the rebound of the luxury club market, as it invested enough capital in the company in December (the amount also is not being made public) that Millennium Partners plans to expand into the Boston and Washington, DC, markets.

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