Press

August 12 , 2005

Gold’s muscling into DFW

Gold’s muscling into DFW

August 12th, 2005 - Fitness chain to move U.S. headquarters from Calif. to Irving Sandra Zaragoza Staff Writer Gold's Gym International, the venerable, 40-year-old fitness chain that's synonymous with celebrities, musclemen and the Venice, Calif., beach, is moving its U.S. headquarters to Irving. Gold's Gym, the world's largest coed fitness chain, will relocate its administrative offices Sept. 6 to a 24,000-square-foot office at 125 E. John W. Carpenter Frwy., merging a majority of the company's departments. Functions to be housed in Irving include franchising, product licensing, sales, marketing, training and development. The relocation will consolidate the company's Austin, Venice and Falls Church, Va., offices, says Gene LaMott, president of Gold's Gym International. The company, which has about 2.5 million Gold's Gym members worldwide, will maintain Gold's Gym's Venice-based international headquarters, which will house about 12 employees. Nearly 65 employees will be relocated to Irving, and the company will look to add about 45 more employees here. The company has more than 2,400 employees in all. The Irving office will also bring Gold's Gym closer to its parent company, Irving-based TRT Holdings Inc., which purchased the fitness chain last year for $160 million from private equity firm Brockway Moran & Partners Inc. TRT Holdings also owns Omni Hotels, a chain of luxury hotels. "Over the last four or five years, we've had tremendous growth both nationally and internationally," LaMott said. "We have outgrown our offices in Venice and Virginia, and so it just became an opportunity with the acquisition of the company." California's loss is expected to pump up North Texas' profile in the fitness industry, as the company plans to add as many as 20 locations locally and to open others throughout Texas in cities like Houston and San Antonio. LaMott says Gold's Gym is coming to North Texas at a time when it is repositioning itself through aggressive expansion, a new franchise model, strategic alliances and a fresh injection of capital from its parent company. 'Deep pockets' Gold's Gym's move to Irving "to be near its source of investment" (TRT Holdings) makes sense, said Rick Caro, president of New York-based Management Vision Inc., a management and consulting firm for the fitness industry. "TRT seems to have a combination of deep pockets and a long-run view for this investment," Caro said. LaMott says TRT Holdings brings more than deep pockets to the table. TRT "brings a different perspective, a long-term vision of growing worldwide," LaMott said. "They've definitely supported us with resources, with a sister company, with additional capital and supervision. From my seat, it is a good deal for us." And TRT's hospitality company, Omni Hotels, a chain with 40 luxury hotels nationally, is one relationship that Gold's Gym plans to leverage, LaMott said. Since 1999, the fitness chain has grown from 400 to 586 gyms, or "stores," nationally and internationally. The number of corporate-owned stores has increased from one to 40. LaMott would not disclose company revenue, but did say the company experienced double-digit sales increases for its 40 corporate stores in the past year. Over the next five years, LaMott says plans call for an aggressive rollout of corporate stores, boosting the number from 40 to as many as 200. The company also plans to nearly double its total number of franchise stores, to 1,000 locations by 2010. Internationally, the company is opening locations in India, Nepal and the United Kingdom. As the company's new backyard, North Texas can expect Gold's Gym to go after a bigger chunk of the local fitness market, industry experts say. North Texas has three Gold's Gym stores -- one in Carrollton, one in Garland and one in Arlington. All are franchise-operated. "We have our administrative headquarters here; it only makes sense to have our product here, and managing it would be our objective," La Mott said. At the same time, the company is out to counter any negative perceptions that may have developed last year, when Gold's Gym owner Scott R. Theeringer shuttered four local stores, leaving members out in the cold. LaMott says that two of the closed locations were reopened as Gold's Gyms, while a third reopened as an independent. "What we've got to do is to prove to the Dallas market that the brand is here to stay and that it is the leader," LaMott said. The company has four leases under negotiation, and eventually could dot the Metroplex with as many as 20 locations, some of which may be franchise-owned. New prototype According to Wyatt Russo of Dallas-based The Retail Connection, Gold's is open to purchasing land for build-to-suit projects, as well as retrofitting vacant boxes. Russo and Steve Lieberman of the Retail Connection represent Gold's Gym in North Texas. "They want D-FW to be a showcase for Gold's Gym," Russo said. "The goal is to get some stores open by the end of the year." Meanwhile, Gold's Gym is also gearing up to launch a new 40,000-square-foot gym prototype this year that will target suburban markets, LaMott said. A typical Gold's Gym store ranges in size from 35,000 square feet to 50,000 square feet, but the company has entered urban locations with 12,000-square-foot gyms. The new prototypes will have standard amenities like swimming pools, group exercise studios, basketball courts and larger day-care facilities. "One of our goals is to develop an experience that is consistent with our heritage. We wanted a specific look, feel and energy associated to the facility; the design, colors and street entrances will create that experience," LaMott said. The Gold's Gym franchise business model is also changing, from a flat fee model to a royalty structure, the more typical model for franchise businesses. Franchisees essentially will hand over a royalty, or percentage of their total revenue, to Gold's Gym. By increasing franchise fees, LaMott said, Gold's Gym will be able to invest in "sales and training support for franchisees, national advertising programs and (uniform) operating systems." Just now, though, LaMott is concentrating on his new Irving office, which will also serve as a training ground for franchisees. "Having (most) of our operating departments under one roof gives us tremendous opportunity," he said.