Sunday, January 2, 2011

Gold's Gym, AKA Leading Edge revival loses its luster

A desperate price structure that already failed once yet still more than twice as expensive as Planet Fitness

So here it is January--peak month for health club member sales nationwide--and Lazarus has not yet arisen from the grave. 'The Leading Edge' went out suddenly on October 19th and almost immediately otherwise sane folks who are exercise addicts started a movement to reopen the club.

By "movement" I mean more in the Arlo Guthrie sense:

And if three people do it! Can you imagine three people walkin' in, singin' a bar of "Alice's Restaurant" and walkin' out? They may think it's an organization! And can you imagine fifty people a day? I said FIFTY people a day . . . walkin' in, singin' a bar of "Alice's Restaurant" and walkin' out? Friends, they may think it's a MOVEMENT, and that's what it is: THE ALICE'S RESTAURANT ANTI-MASSACREE MOVEMENT! . . .

Their Facebook page attracted under 150 like minded fans before disbanding last week in favor of the blog. And yeah I'm a BIG fan of the Power of the Blog, and what I love about Blogger is simple publishing and it's even simpler for Anon folks to interact with the site. So for them to now have under 500 "members" who pledged to join --but put down NO money--once the business opens (by simply clicking a link) is stunningly inadequate.

At its peak (when still called "Gold's Gym") the business probably had 3,000 members paying on average twice the low-end membership rate now proposed and even on the day they died 'The Leading Edge' probably had a 1,000 members, having lost a gaggle to 'Planet Fitness' and the new $50 million Umass Recreation Center two miles down the road.Yes, this billboard probably costs about $5,000 month

By now the vast majority of their former clientele--down 60% from those peak years mid decade-- have joined other clubs in the area. Even more important, the fitness instructors have found other options, either taking up with Hampshire Athletic Club or renting space in town by the hour or taking the major step of opening a storefront facility targeting group exercise aficionados thus draining away about one-third of the target demographic.

Simply put, the overhead at 'The Leading Edge' killed them: prime location rent, utilities sucked up by the cavernous commercial space, and of course the employees required to cover very extensive hours of commercial operation.

If long time members had been paying attention they would have seen the handwriting on the wall two years ago when the owners abandoned the 'Gold's Gym' franchise (in order to save money of course) and relaunched as 'The Leading Edge'.

Ironically the volunteer committee of former members attempting to orchestrate this long-shot revival have chosen the name of another former dead club 'The Gym', which was located at appropriately enough the Mt. Farms Mall back when it was known as "The Dead Mall".

And now the Mt Farms Mall--far from dead since Wal Mart moved in--hosts 'Planet Fitness' where predatory pricing is the norm. Thus even now with the proposed unrealistically low rates for 'The Gym' they are still more than twice as expensive as 'Planet Fitness'.

Although virtually all of them commence with good intentions the tragic reality is about one-third of new business start ups fail in the first year. The chances for survival of a committee-run gym are anexorically slim, especially in this cutthroat market.

But fortunately, we will never know--since 'The Gym' will never actually open.

18 comments:

Anonymous said...

who cares about muscle bound meatheads and vain princesses who can't figure out how to stay in shape without an artificial gym environment

go take a hike on shamhersts many conservation land trails..... you fuckin pay enough for them

LarryK4 said...

Yeah, I always said my #1 competitor was the combination of the Bike Path and decent weather.

Of course that was before the combination of Gold's, Planet Fitness and the Rec Center opened.

That's the other naive thing about 'The Gym': they now plan to open in March, right about the time people will be taking their exercise programs outdoors.

Ed said...

The point that everyone (including you Larry) missed about "The Death Star" is that it is free only to undergraduates & employees.

UM Graduate students have to pay $120/semester to use it *just once* or to use the pool *just once* and that is one incredible market that no one has tapped.

It is called "marketing" and you would have to do a bit of market research to meet needs and such, but grad students don't use the rec center....

Anonymous said...

"The contract's mission (presumably written by Geryk and Woodland) called for training the Interim in critical job responsibilities"

Larry, I know this is off topic but am I reading this right? Is public money being expended to give Maria G the UMass education that everyone else applying for that job HAD TO PAY FOR????

That is a major scandal in the context of the Springfield Housing Authority if true -- and people went to jail for that....

LarryK4 said...

Ed,

Undergrads outnumber Grad students at Umass by well over 3 to 1, thus they are a niche market.

And that price for Grad students or faculty or anybody who ever graduated from Umass is still W-A-Y lower than it would/should be for a private facility to offer the same services without the tax advantages of being a non-profit, educational facility supported by tax dollars.

Anonymous said...

I guess the moral of the story is:

No one, absolutely no one, is as smart as Larry Kelley.

Isn't that really the point of all this? Self-congratulation.

BFD.

Anonymous said...

Larry. The highest rating reality show of all time would of been during the year of the collapse of your club.

The fits you must of had in your office, karate chopping shit, almost cleaning that shit-hole.

What a world it is! A failed buisnessman criticizing profitable businesses. Larry, you sir are a champion.

Ed said...

Undergrads outnumber Grad students at Umass by well over 3 to 1, thus they are a niche market.

It actually is closer to 5:1 but there are nearly 6000 graduate students which exceeds the student body of Amherst and Hampshire colleges.

And that price for Grad students or faculty or anybody who ever graduated from Umass is still W-A-Y lower than what one would pay for what they offer -- but is that what the graduate students want? What you call "predatory pricing" is actually realistically looking at the fact that low volume usage at a low price does make money if membership is high enough.

BTW -- the UM-can-do-it-cheaper sorta doesn't fly with the Gateway project, does it? And why?

LarryK4 said...

UM can do it "cheaper" at the Rec Center simply because tax dollars built it ($51 million)

So all they need do now is cover the operation costs--utilities, employees, equipment repair, etc.

And in a sense, like 'Planet Fitness' they have a fair amount of clients who never use it (since ALL undergrads pay for it whether they use it or not)

Gateway will be built by the private sector using private money. And since it will be on the tax rolls, the more expensive it is the better.

Anonymous said...

I guess the moral of the story is:

Larry's a sore loser who hates to see anyone else trying to succeed.

LarryK4 said...

No, I just hate to see people (many of whom I know) waste their time.

Roach patrol said...

""The contract's mission (presumably written by Geryk and Woodland) called for training the Interim in critical job responsibilities"

Larry, I know this is off topic but am I reading this right? Is public money being expended to give Maria G the UMass education that everyone else applying for that job HAD TO PAY FOR????

That is a major scandal in the context of the Springfield Housing Authority if true -- and people went to jail for that...."


It's only the very tip of the iceberg.


And the snooty little town that pretends to care?


Complacently masturbating into oblivion.



Now THAT'S Priceless.

Ed said...

UM can do it "cheaper" at the Rec Center simply because tax dollars built it ($51 million)

No, it can't. Between union rules and state purchasing requirements and the general administratum of UMass, it is simply impossible to do anything nearly as cheaply as you can do it in the private sector.

My favorite example -- this back when Serve-U was still in Northampton (damn, I miss them) involved ADA compliance.

ADA requires that you mark doors that open into staircases so that the blind can find their way out of the building -- a decent thing to do and it is the law. And there are specifications as to what the sign has to have on it to count as a "compliant" sign.

Serve-U sold such a sign (retail - to anyone) for about $10. UMass paid $50 each for these signs -- and this came out in the investigation of an ED-OCR complaint (not mine).

Puffton can do maintenance on an apartment in a day or two -- and have it done right (which not everyone else does) while it will take upwards of a month to have it finished in North Village.

In the private sector, if you want to replace a steam line you dig a hole and do it. UMass is now into the third month of working on this in Lincoln Apts -- the project officially started July 1st and might get done by spring.

Larry, "privatization" works in spite of the tax savings because of competition and because the private sector can't afford the foolishness pandemic to the university.

People can and do compete with Walmart and people could have successfully competed with the RecCenter -- it is called 'niche marketing' -- market to a group that they can't afford to market to.

How is Hastings able to stay in business with both Walmart and Staples just down the road? Enough said???

Ed said...

It's only the very tip of the iceberg.

Well, if you want to chart the iceberg, I will be happy to do something about it.

Trust me on this -- I have neither time nor access to research this but you don't want to know how many people I know in the education field, and I don't just mean on the state level.

If I get real proof of real things -- not who is sleeping with whom and all the petty small-town stuff of adult-sized children who really ought to grow up, but real stuff -- if I get this then I will get it to the right people. Trust me.

I live in a world of facts -- give me some facts and a way to verify them and you might be surprised what just sorta happens to happen...

Anonymous said...

Hey Ed:

You are also an adult size child. When are you going to grow up and actually get a job in the real world and work for a living?

Anonymous said...

Once again Larry shows what a poor understanding of business he has. Nearly everything stated in this post is incorrect.

One who knows

Anonymous said...

Wow, sour grapes much? Every functioning gym in the Valley shows your own failure.

LarryK4 said...

Yeah, well if Planet Fitness last 28 years in business feel free to post an "I told you so" comment--Anonymously, of course.