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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (7446)	11/23/1997 8:01:00 PM
From: Eric Klein	Read Replies (1) \| Respond to of 9285

Pancho: A couple things I noticed in this interview with Lee Hillman CEO of BFIT: quote.yahoo.com Bally Total Fitness has opened BFIT Essentials shops in about 40 clubs this year. The company plans to make the shops, which sell apparel and accessories, into a $20 million business in the next three years with margins that could reach about 20 percent, Hillman said. They have a shop like this at the Gold's gym that I go to. There's never anybody in the shop although the gym is always packed. I'm always waiting for them to close the shop and use the space for something useful. I'm not too sure that BFIT Essentials shops are going to help their bottom line, especially in the short term. In the past Bally Total Fitness ''had to force cash into the business by offering highly discounted memberships,'' Hillman said. Hillman said margins on memberships had been about 12 percent. ''Our goal is to move these over 20 percent in the next several years,'' he said. Why has that (discounted memberships) changed. Lots of clubs work this way, they recruit a lot of members, get a big upfront initiation fee. Many people join a club, then don't use it (human nature). In the interview, they say they'll be profitable next year. Do you know of any factors that would tend to support these statements? Do you have any projections for this quarter and next year? Thanks in advance. Eric