Americans add weight to the sports retail industry

Colorado Springs Business Journal, Oct 1, 2004 by Marylou Doehrman

Exercise machines are setting the pace for a healthy and fit American lifestyle and a healthy and fit U.S. economy. Body-shaping apparatus such as treadmills, exercise cycles, elliptical machines and free weights topped sporting equipment sales in 2003, according to the Sporting Goods Manufacturing Association.

Americans' quest for a good shape amounted to $3.8 billion. Golf equipment drove the No. 2 spot for sales. The $2.4 billion that was spent in 2003 on golf clubs, tees, balls and whatever else it takes to stay on course - the golf course - kept golfing equipment manufacturers in good shape as well.

Firearms and hunting equipment, camping, team sports and fishing rounded out the top-six categories in sports equipment sales.

Jay Huey is a native Coloradoan and the owner of Colorado Springs- based Fitness Systems. Since 1980, Huey's store inventory has been exclusively exercise equipment, and, as his buyers purchase for the lean and mean look, Huey's revenues have fattened. Three and one- half years ago, Huey bought land, constructed a new building and moved the store from its original North Academy location to Woodmen Road and Academy Boulevard.

People are finding out that taking care of their health is not optional, Huey said. It's becoming more and more a part of everyone's lives, and it's even more prevalent in Colorado, where people are willing to make purchases to take care of themselves. What we sell isn't required like a bed or car tires; it's purely discretionary.

However, as the news media continues to report that a sedentary lifestyle is the greatest risk factor for heart disease, exercise equipment becomes less discretionary, as Americans adhere to the experts' advice. Huey's business has grown every year for the last 24, and he said his top-selling item is a toss up between the treadmill and the elliptical machines.

Nationally, the sporting goods association reported that treadmill sales accounted for 26.4 percent of all fitness equipment sales. Elliptical machine sales increased 16.7 percent, from $120 million in 2002 to $140 million in 2003.

Although Huey can't nail down the store's crown seller, he can pinpoint his customers. Most of our customers are 30 years or older and married with kids, Huey said. They are mainly couples with young kids, and stopping off at a gym on the way home from work is not an option.

From a fitness ball that Huey said is the best $30 in fitness equipment you can spend and a variety of free weights to a complete cross section of exercise machines, the customer can easily find his or her fitness niche. If you want to be successful with an exercise routine, you have got to like the piece of equipment you are using, he said.

Huey can outfit the exercise beginner or advanced guru with weights and machines and other items such as flooring, gloves, belts, heart-rate monitors and videos. He said weight machines are more popular than free weights. The innovation and technology in weight machines is great for workouts, he said. But one piece does not make your fitness center. However, any piece of equipment that arouses the couch potato is good, and the 10-to-15 average lifespan of the equipment justifies the cost, Huey said. It is affordable, especially if you are looking to replace the costs of joining a health club.

Employees of corporate America don't have to buy their own equipment or join health clubs - their fitness center could be a stairway away from their offices. Huey equips Intel and Federal Express, along with a few universities, colleges, apartment complexes and government entities, with exercise equipment. And all that equipment output adds up to a first place among sporting goods sales.

Gaining fast in sports categories, with a significant increase in sales are paintball, up 5.4 percent from last year to $390 million; ice skates and hockey equipment, up 4.9 percent to $214 million; and water ski equipment, at $128 billion, a 4.9 percent increase from 2002, according to the sporting goods association.

Sports apparel sales dropped 2.5 percent in 2003; however, it remains the largest segment of the sports and recreation industry with sales of $22.8 billion.

Team sports apparel is a big seller, too, although it's not included in the $1.5 billion total for 2003 team equipment sales. When football season kicked off, so did team apparel sales at Fanzz Sports Apparel, said James Stephens, the manager of the Citadel- based store. Larry H. Miller Enterprises, an offshoot of the Utah Jazz, owns the four sports apparel stores located in Colorado.

We sell team apparel only, and our No. 1 seller is the Denver Bronco replica jersey, Stephens said. However, if the Broncos intercept too many losses, jersey sales get a whipping, too. Our business is reliant on teams that do well. When the fan following grows, people wear the colors, and they shy away when the team doesn't do well - the fans love the winners.

The fair-weather-fan attitude makes it hard to predict hot- selling apparel items. Last year the Broncos were inconsistent, and apparel sales didn't go far, Stephens said. But the Nuggets did well, so we did, too.