As Dustin Grosz steps into the president’s role at Star Trac, one of his top priorities is to streamline the company’s product offerings.
Grosz, who resigned his position as CEO of Stairmaster to take on his new role after Mike Leveque resigned earlier this month, said in a statement from the company that he will streamline the business, which has grown complex in the last few years due to product portfolio expansion. The streamlining process will include shifting the Irvine, CA-based company from manufacturing products to managing a global supply chain.
Kevin Corbalis, executive vice president of marketing and product development at Star Trac, explains that this means Star Trac won’t offer as many “sister” products as it has in the past. Grosz will evaluate which sister products, or those of the same model with different options, are not selling as well and will end production of those.
“We might have three or four options for a hotel buy, and in general, no one buys the lowest of the low end,” Corbalis says. “So we’ve had SKUs (stock keeping units) in stock of those lower-end models, and they don’t move. Why carry it? The value is in those higher-end models. So it’s about rationalizing that value stream. If you are into the right mix for the customers, that’s all you need to sell. You don’t need to have a small variance of that.”
Star Trac will streamline its supply chain by continuing to outsource much of its manufacturing, Corbalis says. The frame welding, integration and quality assurance tests that were done at its plant in Irvine will now be done at Land America Health and Fitness Co., in Xiamen, China, and the Irvine plant has become a warehouse with some of the permanent staff moving to Star Trac’s Murrieta, CA, plant, which will continue to make Star Trac’s Impact selectorized strength line. Michael Bruno, who purchased Star Trac last year, also owns Land America, where much of the company’s equipment is now manufactured, although Star Trac has partner factories around the world that will continue to do turnkey production for it.
“I’ve taken part of my U.S. team and moved them to China, and they are involved in the manufacturing , build, control and quality assurance checkpoints,” Corbalis says, adding that most of those employees were quality- and product-oriented engineers. “So we transplanted what we had here, and we’ve moved that expertise over to Land America.”
Consolidating much of the production and warehousing at Land America helps Star Trac logistically in how it fulfills orders, Corbalis says.
U.S. customers should not be concerned about lag time in order fulfillment now that much of Star Trac’s production is overseas, Corbalis says, because Land America has been manufacturing much of Star Trac’s equipment for years. When Star Trac bid out the production of its luxury strength line several years ago, Land America won hands down, he says, and that made moving other product lines there easier.
“They’ve been remarkable,” he says. “To be able to leverage that facility and capability that much more to our advantage only helps us and our customer base. We are a global company. We sell around the world. Having a centralized location to consolidate and ship from that has enormous manufacturing capability is a great thing.
The streamlining process will also include a company-wide effort to strengthen the customer service department.
“Being profitable will allow us to deliver on our brand promises and ultimately help us win back customers by providing better customer service,” Grosz said in a release. “We need to grow revenue in a way that benefits Star Trac as a company, but that also benefits our customers.”
In November, Star Trac entered into an Assignment for the Benefit of Creditors, a common law business liquidation mechanism that is an alternative to a Chapter 11 or Chapter 7 bankruptcy filing.