Overland Park, Ks — Exercise equipment sales for institutions, such as health clubs, universities and military facilities, fell 9.4 percent to $1.04 billion in 2008, down from $1.14 billion in 2007 — the largest sales decline since the 1990s — according to the Sporting Goods Manufacturers Association's (SGMA) 2009 "State of the Industry" report.
And while the numbers may seem daunting on paper, Mike May, SGMA director of communications, says the fitness industry is faring better than most industries.
“The drops in equipment sales are more of a result of a struggling economy and not as a result of lack of interest in the exercise industry,” he says. “If it had been a lack of interest by consumers, the decline would've been bigger. Fitness equipment is still the biggest category of the sporting goods industry.”
Robert Hornbuckle, vice president, Hampton Fitness Products, a strength equipment manufacturer based in Ventura, CA, says, “We've definitely seen clubs cut back their budgets in the first part of 2009, though the fitness industry hasn't been hit as hard as other industries because people are still taking time to go to the gym and relieve stress.”
David Scott Cohen, owner of Excelsior Athletic Club in New York City, agrees, saying, “We have not done any equipment purchasing in the past year. This is directly due to the economic state and the fact that monies were put into much-needed repairs.”
Strength equipment sales were less affected than cardio sales. Institutional sales for free weights, benches and racks fell 3 percent in 2008 to $73 million, from $75 million in 2007, whereas institutional treadmill sales fell 11.3 percent to $227 million in 2008, from $256 million in 2007.
May says big-ticket cardio items experienced a greater decline than strength equipment because strength equipment inherently is a smaller market and cardio equipment is often more expensive.
Free weights remain a popular equipment choice for health clubs. The IHRSA Profiles of Success 2008 report ranks free weights as No. 1 among the “Most Commonly Offered Items In Facilities,” with more than 85 percent of clubs reporting that they offer free weights.
Club owners are playing it safe in their purchasing, says Liz Bianchi, marketing director for Iron Grip Barbell Co., Santa Ana, CA.
“I think it's very clear that the majority of club owners are opening fewer clubs, and, therefore, the level of equipment purchasing is down,” Bianchi says. “We sell every channel, however, from hospitality, to parks and recreation centers, to schools and the military, and our business is still healthy and trending very positively for the first half of this year.”
To promote greater strength equipment sales in the second half of the year, Iron Grip is exploring strategic partnerships with leasing companies that serve the fitness industry, she says.
Hampton Fitness is adding value to its products by allowing club owners to customize new dumbbells at no extra cost through the end of the year, Hornbuckle says, but the company is not lowering prices.
Cardio manufacturer Landice Inc. is reducing prices with a summer-long recession busters promotion. “It's hard to tell yet if it's having an effect,” says Greg Savettiere, president of Landice, Randolph, NJ.
Savettiere says his company experienced a pickup in sales for the second quarter of 2009.
“I think April was the bottom for us,” he says. “We just think there was a lot of fear out there, and now that people are seeing the bottom, they're starting to spend again.”
May also says a recovery is on the horizon, though he says it may be slow going.
“We'll probably see another year of decline, but I'd be surprised if we saw a nearly 10 percent decline in 2009 over 2008,” he says. “Sales will probably be between 2007 and 2008 numbers. I don't see a major recovery, but I do see a recovery.”