Reasons Barry Klein Is Leaving Day-to-Day Club Operations

This article appeared in the May issue of Athletic Business. Athletic Business is a free magazine for professionals in the athletic, fitness and recreation industry. Click here to subscribe.

Unlike our AB columns of the last six years, this "Rob & Barry" column is coming only from Barry. As we've chronicled in these pages, often with terrific feedback and encouraging words from readers, being an owner of an independent health club is an emotional rollercoaster. This is an emotional column for me to write because it will be my last, and Rob will be going solo from here.

I am leaving the day-to-day operations of our business. So, while I am still a co-owner with Rob, I will no longer be working in the trenches.

It's actually like turning back the clock by 20 years for Rob and me. When we got into this business back in 1995, we did so by purchasing an existing gym. For the first seven years, I was employed in software, the natural career path for a computer science major. I worked on gym issues part-time, during evenings and weekends. It was in 2003, when we decided it was time to expand, that I joined Rob full-time. Now, as we revisit the past, I won't even need to worry about part-time duties, given the capable group of managers our clubs now employ. With all the free time I'm going to have, I'm thinking I should start working out again! Ironically, like so many gym owners we meet, I should be in better shape.

TOO MANY GYMS
The circumstances that led us to make this decision are well known to anyone in our industry, and we've written about them frequently. You want a sound bite? There are too many gyms. As a result, the pie of customers is getting cut up into ever-smaller pieces.

Making matters worse for us is that the population base in our community — after growing for many years — is now shrinking. Our business is simply smaller than it was.

I volunteered to help make things smaller on the expense side of things because I have other options for employment and because — and I say this with Rob's blessing — there's nothing on the horizon for our health clubs that excites me. We have no expectation of expanding or opening another club. We are limited with respect to opportunities for corporate relationships. For someone who enjoys "the business of business," there are no plans to push the business into new frontiers. And with no such mountains for the business to climb, I'm going to go look for some mountains of my own.

Operating our business on a day-to-day basis is going to be what it's all about, and nobody does that better than Rob. He started earlier this year by reinventing the weight room at our main location, and experimenting with new advertising and marketing techniques. It's a dogfight out there, and the battle to get and keep every member is more difficult than ever. That, as always, has been and will continue to be Rob's focus.

I'm not going to miss that dogfight. In fact, as I have been speaking with people outside of the industry and I say things like, "There are just too many places to work out," they all nod their heads knowingly. Even the average person on the street can't help but notice.

A great term I recently read captures the fitness industry: over-stored. There are simply too many storefronts offering fitness, and there aren't enough consumers to make them all viable.

We are fortunate that we have various levers to pull that are allowing us to remake ourselves, but many club owners are not so fortunate. The sad reality is that our industry needs a much-anticipated shake-out, but we have found it fascinating to see how many gyms and boutiques continue to exist across the country. One reason for that, we suspect, is that many boutiques are owned and operated by people who have no need to make a profit. They are running facilities as hobbies and their income, or lack thereof, does not impact their family's way of life. The shame of that, for businesses like ours that employ many people, is that operators who are in it just "for the love of fitness" impact those of us who have to pay our home mortgages.

The race-to-the-bottom on pricing is another trend that I won't miss. Sure, there is that small percentage of the population that will pay hundreds of dollars per month for gym memberships, classes and the latest fitness gadgets. But for the rest of America, it is now all about the checklist of stuff that the gym offers and getting a deal on price. Even five years ago, a gym could tout its value as being separate and distinct from its price, and marketing efforts were supposed to be about "benefits," not "features." But, now there is no distinction in the eyes of most consumers about price versus value or features versus benefits. And that's a shame, too.
 

ABOUT STAFF, NOT STUFF
Don't get me wrong. Every business has its competitors and every business has its changing dynamic. Just ask small "Main Street" operations how they felt when Walmart moved into town, or how bookstores were affected by Amazon. Nobody is immune from competition. I just won't miss the day-to-day "trench warfare" nature of what now amounts to competition in the health club space.

What will I miss? We have great clubs with great employees, and after a few years of frustrating turnover, we now have a young and motivated group who want to grow their careers, help grow our business and have a great time together. They show our members every day that it really is about the staff, not the stuff, and it's always inspiring when members recognize that and share their enthusiasm. As Rob often says, our members often don't know how good they have it until they go elsewhere.

It's been a good run. Rob and I have been friends for 38 years (okay, 36 years — we met in 7th grade but he was a pain in the ass until 9th grade). We've been in business for 20, and enjoyed years of writing this column and speaking professionally about club management. The business will be just fine without me around on a daily basis, and now I get to feel like the big-shot owner when I walk in. Rob's got the real work to do, and you'll still be hearing from him.

Thank you for your support and keep reading "Rob."

This article originally appeared in the May 2016 issue of Athletic Business with the title "I'm leaving club operations, and here’s why"