Yesterday began with early morning workouts, but I did a little different workout from what I normally do. Yes, I tried out the Precor EFX and AMT, but that was just a warm-up. My real “workout” was a stretch at the Tailored Flexibility booth. Aaron Taylor, the owner (kind of clever use of his last name in the name of the company), put me through some of the stretches that he uses on his clients, who include boxer Muhammad Ali, golfer Betsy King and comedian Billy Crystal. Some of the stretches showed me that I definitely sit too long as my right hip flexor hurt. If Taylor lived in Kansas City rather than Phoenix, I'd definitely be going back for another visit.
Later that morning, I attended the financial panel session, something I look forward to each year. Moderated by Rick Caro of Management Vision, the session gave me a little hope for the future, as many of the four panelists see a turnaround coming at the end of the year. (But I won't say more about the session as Stuart will blog about it in more detail.)
Later, I met with one of the panelists, Brent Knudsen of Partnership Capital Growth, San Francisco. The company was involved in several big deals in 2009, including some recapitalization of Anytime Fitness and the World Fitness/Steve Nash deal in Canada. He is now working on six other deals.
Knudsen said that he sees some regional consolidation possibilities in the future but not national companies consolidating. Regional consolidation makes more sense as a company can take advantage of member relationships, advertising and other opportunities by clustering clubs.
He said that there has to be consolidation of the manufacturers in the industry. The market simply cannot sustain all the current large equipment manufacturers, even when the economy turns around, he said, because the good times we had before won't be coming back. The economy will get better, but it won't return to the 2007 level, he said. Besides, he said most club operators want a consistent look in their equipment and one manufacturer to support that equipment. That means for a manufacturer to be successful, it has to provide a broad range of equipment with a consistent look. One-off manufacturers won't survive, he said.
If Knudsen is correct, we could see a lot fewer exhibitors at future trade shows. I'm not sure how good manufacturer consolidation would truly be for the industry. Competition is what helps keep pricing affordable for many club operators, but if just a few manufacturers survive, pricing could climb at a greater rate than in the past.