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New Orleans City Business (New Orleans, LA)

Longstanding gyms and health clubs in St. Tammany Parish are seeing increased membership numbers this year amid a few shakeups, including the closing of Holiday Fitness in Covington last week and the planned opening of an LA Fitness in Slidell.

"We're ahead of budget. We're outperforming last year," said Bobby Shaw, general manager of Pelican Athletic Club. His is one of several exercise facilities in St. Tammany, an area that has the most of any parish in southeast Louisiana.

Local gym owners say the market continues to be strong, but some of the smaller facilities are being squeezed out as larger, multiuse gyms absorb a larger market share.

In Covington, Snap Fitness and Holiday Fitness have closed their doors in the past two years.

"When you get fitness centers closing down, you don't like to hear that," said Freedom Fitness owner Jay LaFrance.

Freedom Fitness moved into Mandeville two and a half years ago following a four-year stint in Covington.

LaFrance said the rule of thumb for a gym's customers is that they live in a three- to five-mile radius. A 20 percent to 30 percent profit margin is considered healthy for the industry.

Upfront costs such as treadmills and exercise equipment can average between $5,000 and $7,000, LaFrance said. Those televisions attached to the treadmills? Up to $1,000, he said.

Staffing is the biggest cost for any club, Shaw said. Equipment maintenance and leases make up most of the other expenses, he added.

In October, Exclusive Fitness took over French Riviera Fitness on Highway 190 in Covington. Cory Wooten, owner of Exclusive Fitness, said the sale didn't have anything to do with the financial performance of French Riviera.

"They were wanting to sell because they didn't want any of their gyms on the North Shore," he said, explaining that French Riviera wanted to consolidate its locations onto the South Shore.

Representatives from French Riviera could not be reached for comment.

Wooten said he has opened gyms or acted as a gym consultant in at least five states.

The purchase came with existing memberships and equipment, and Wooten said that didn't affect his business mindset.

"From my standpoint, that didn't stop me from saying, 'Hey, we can make a push,'" he added.

Wooten said he sees the North Shore as a place to franchise and build more facilities. Rather than taking over existing fitness centers, he said he envisions using space that has not previously been a gym site.

Exclusive Fitness will try to separate itself by price point, he added, with memberships that begin at $9.95 a month.

Franco's Athletic Club, which has been in St. Tammany Parish for 25 years, has grown its membership this year to about 16,000.

To capitalize on the growing popularity of CrossFit, a group exercise class that focuses on strength and conditioning, Franco's recently opened a 16,000-square-foot, CrossFit-only facility on North Causeway Boulevard in Mandeville.

"We have recognized that one of the growing trends has been the multifunctional training," owner Sandy Franco said.

Franco's had been offering CrossFit at its main location but decided to open the new one to serve its existing members and lure others, she said.

Franco said it is critical to treat the gym as a multiuse facility, almost like the entertainment business. As more people go to health centers, they want more options, she said. Franco's has amenities that include a hair salon, day spa and several televisions and couches in addition to their weight rooms, pools and tennis courts.

Gyms like Franco's and Pelican Athletic Club have helped keep national chains out of the St. Tammany market until recently.

LA Fitness, which according to its website has over 500 clubs across the U.S. and Canada, is planning its first Louisiana location at the Fremaux Town Center. The 41,000-square-foot facility is planned to open by the end of this year.


May 27, 2014


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