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Jim Worthington took a chance during the recession by investing in upgrades and expansion for the Newtown Athletic Club, a risk that seems to have paid off.
The 12,000-square-foot fitness area addition to the Newtown Athletic Club is just one of the changes the facility will undergo this year. Photo courtesy of Newtown Athletic Club.
No More Room
Once these two projects are complete, the 20 acres on which the NAC sits will be built out with no more room for expansion, Worthington says. However, growth will not stop there, as he plans to focus on increasing revenue in each department and focus on medical wellness in hopes of increasing his club’s revenue from an estimated $11.5 million this year to $14 million in a short amount of time. So far, the changes have helped increase first quarter revenue from $2.4 million in first quarter 2011 to $2.8 million in first quarter 2012, he says.
But the revenue increase cannot be attributed to the physical expansions alone. Worthington also added staff and beefed up marketing during the recession. The NAC went from a marketing department of one full-time person and one part-time person to five full-time employees. Those staffers started marketing each of the club’s profit centers—salon, personal training department, party division, and food and beverage, among others—as separate businesses in which the marketing person was compensated for revenue increases. The result was an increase in revenue for each department, including 30 percent growth for the spa business.
Worthington also hired full-time salespeople from outside the industry and paid them on commissions and incentives, but the sales manager was paid based on net gain of members.
The sales efforts, along with a member referral program in which members received $150 for every person they referred who joined, resulted in 70 percent of new members coming from referrals and a net gain of 850 membership units from April 2011 to April 2012, he says.
The growth has caused Worthington to consider capping the NAC’s membership, which has created even more urgency for people who want to use the pool complex to join, since only NAC members can do so, he says.
Worthington is well aware that not all club operators were able to expand during the recession. He credits his club’s ability to do so to the NAC’s strong business model, which has helped establish a good relationship with its bank and the ability to secure necessary loans.
“The club itself fully supports any loans that we do, so that makes it double easy for the banks [to lend to the NAC],” Worthington says.
That good standing with financial institutions also helped Worthington open the 50,000-square-foot Horsham Athletic Club in Horsham, PA, in April 2011. And in April of this year, the company purchased 10,000-square-foot Fitlife Performance Training in Ivyland, PA, from Josh Tyler, who will manage the NAC’s sports performance training program when it moves to the new annex this fall.