The Galiani brothers step down. Gene LaMott steps up.

VENICE, Calif. — The brothers behind the 1999 acquisition of Gold's Gym have relinquished their management positions with the company. Kirk and John Galiani — CEO/president and president of corporate development, respectively — will remain on the board of Gold's Gym International (GGI) as the company's largest individual shareholders, but they have given up their executive roles. Instead, they will now concentrate on building and running clubs.

Peter Brockway — managing partner with Brockway Moran & Partners (Boca Raton, Fla.), the investment firm that funded the Gold's Gym acquisition — said that the decision to move out of day-to-day operations was a “mutual agreement” between his firm and the Galianis. He added that the brothers are very good at developing clubs, evidenced by the fact that, prior to the acquisition, they built up the G Group, a successful group of Gold's Gyms in the Washington, D.C. area.

Kirk Galiani told Club Industry that John and he had been thinking about the move for six months. They wanted to give up the demands of executive positions so they could spend more time with their families — and more time working to build and develop clubs.

“When you get home at 8 o'clock, 9 o'clock at night, and you see your kids for half an hour, it's not real good,” Kirk said. “And for me, it was always more fun opening up clubs, being with the members — that was what really drove me, made me get up in the morning every day.”

With Kirk and John leaving GGI's executive team, COO Gene LaMott has been named president and CEO. LaMott had been a Gold's Gym franchisee in Portland, Ore., before selling his clubs to 24 Hour Fitness and becoming a divisional president of that chain. He returned to Gold's Gym in 2000 when he was hired as chief operating officer, a position that will not be filled now that he has been promoted.

LaMott told Club Industry that he admired the job the Galianis did during their two-year tenure. They educated investors about the Gold's Gym parent company, rolled the G Group into GGI corporate, assembled a professional management team, repositioned the Gold's Gym brand, expanded internationally, and grew the number of franchised and company-owned Gold's Gym locations. Plus GGI put together a number of licensing deals with the likes of ICON, a manufacturer of consumer fitness equipment.

In their new roles, Kirk and John have signed agreements to develop clubs in key areas for GGI. “They are going to use us on helping them with certain core business ventures, as well as I'll be working on some of the acquisitions and some of the greenfields,” Kirk said.

“Our hope is that they continue to grow clubs and develop them, so that we can turn around and make them part of the parent company as they mature,” LaMott said.

Indeed, growth seems to be a major strategy for GGI. Despite slumping economic conditions, the company remains strong, according to LaMott. He claimed that GGI is forecasting growth of 49 percent for 2001, compared to 2000. This growth includes the company's three sections: corporately owned clubs, franchising and product licensing.

With this type of growth expected for GGI, Brockway Moran remains confident in its investment in the fitness industry. “We are aggressively going forward with plans both on building new clubs and acquiring,” Brockway said, “and we are very excited.”

The Club Industry Advisory Board

Rick Caro, Management Vision and the Spectrum Clubs
Casey Conrad, Communication Consultants and Healthy Inspirations
Kirk Galiani, Gold's Gym International (GGI)
Ken Germano, the American Council on Exercise (ACE)
Jill Kinney, Club One Inc.
Douglas A. Ribley, Akron General Health System
Stephen P. Roma, WOW! Work Out World
Steven Schwartz, Tennis Corporation of America (TCA)
Julia Wheatley, Women's Fitness Center