With the economy in its worst shape since the days of the Great Depression, it should come as no surprise that many health club owners are changing the way they do business in order to, well, stay in business. Perhaps one of the first things that has changed is purchasing habits.

"The overall economy is affecting everyone's purchasing habits, from consumers to businesses," says Jeffrey Keller, president of the Independent Health Club Networking Association (IHCNA), an association for single, independent club operators. "The health club industry isn't immune to this, despite it faring well thus far in 2009. I see many clubs shying away from bigger purchases in 2009."

Instead, Keller says that club operators are spending their money on better programming to attract members, rather than better equipment.

According to the Sporting Goods Manufacturers Association (SGMA), total manufacturers' sales (in wholesale dollars) for the U.S. fitness industry in 2007 grew at an annual rate of 2.9 percent. Numbers aren't yet available for 2008, but faced with tough economic times, some club owners are now putting off or scaling back on strength and cardio equipment purchasing, leasing rather than buying, or purchasing used or remanufactured strength and cardio equipment instead of new equipment.

A January survey of the clubs that appear on Club Industry's Fitness Business Pro's Top 100 clubs list found that of the 18 respondents, only four did not plan to purchase new equipment this year. (See related story, Industry Growth Still Anticipated.) However, of the 14 club operators who said they would be purchasing this year, half noted they would spend less this year than last year. Three of them plan to spend more, and four plan to spend the same.

Scaling Back

Keller says that some savvy club operators may not be feeling the pressure to scale back or find alternative methods to purchase equipment because they prepared for this bad economy by purchasing equipment ahead of time. However, club owners that weren't preparing late in 2008 are between a rock and a hard place because most won't have enough capital to make purchases, and credit lines for both loans and leases have dried up for the time being.

Anndee Wright Brown, CEO of Defined Fitness, Albuquerque, NM, says that she understands the hesitancy of many club owners to spend money on new equipment, preferring to keep more cash reserves on hand to offset any downturn in revenue. She does plan, however, to continue to purchase new equipment.

Greg Justice, president of AYC Health & Fitness, Prairie Village, KS, agrees, saying, "Our strategy hasn't changed with regard to purchasing equipment. We prefer owning our equipment. We're very good about maintaining our equipment and getting a long lifespan."

Jeff Jowers of Jowers Training and Tacoma Bootcamps, Tacoma, WA, still plans to buy equipment, but he is buying versatile equipment, such as kettlebells, bands, medicine balls and bodyweight equipment that can be used for more than one purpose.

Some owners are resorting to a unique approach to acquiring equipment. Dee Tidwell, owner of Championship Golf Fitness, Denver, CO, has developed relationships with local exercise equipment stores.

"We are cross marketing and working together to bring new customers in both our doors separately and as a team," Tidwell says.

Because some club owners are putting off large capital purchases right now, some manufacturers and leasing companies are seeing inventory increase, causing them to offer better deals on new equipment than in previous years. In fact, Tidwell says she's received many offers and notices about sales from equipment manufacturers and small product companies looking to "get rid of inventory."

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