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Yahoo! News Obesity Rise Not Fattening Fitness Firms By Jackie Sindrich NEW YORK (Reuters) - Americans are contending with ever-expanding waistlines, but they aren't flocking to the companies focused on helping them fight the problem. Some of the biggest names in the fitness and weight-loss
industries are struggling to sign up members, and sales of home
exercise equipment are sliding despite the obesity epidemic.
Since 1980, the rate of obesity has doubled among U.S. adults and
tripled among adolescents, according to the U.S. Surgeon General.
Nearly two-thirds of the population is now overweight.
Yet surveys show relatively few Americans are inclined to take
the steps to slim down, and an uncertain economy may have made
dieting and exercise even less of a priority.
Such attitudes haven't helped the bottom line of companies like
Weight Watchers International Inc.,
which cut its 2003 earnings outlook in August.
The Woodbury, New York, company, which holds more than 44,000
weekly group support and educational meetings, said attendance in
its key North American market was not growing as much as it had
planned. Its stock price has since declined about 14 percent.
Analyst Kathleen Heaney of Maxim Group said Weight Watchers had
faced bad weather, and its U.S. advertising campaign was running its
course. The company, which reports third-quarter results on Nov. 5,
rolled out its new Flexpoints campaign later in August.
Meanwhile, another diet company,
Nutri/System Inc.,
said revenue slumped by a quarter during the first half of the year.
And recently Anglo-Dutch food group Unilever (UNc.AS)(ULVR.L) again
cut its 2003 sales growth target for top brands, in part due to weak
sales of its Slim.Fast products.
FLABBY FITNESS MARKET
Companies that sell gym memberships and equipment are also
suffering.
Nautilus Group Inc.
said last month it would cut an unspecified number of jobs after a
steep drop in quarterly sales and income resulting from increased
competition and weak consumer spending.
Bally Total Fitness Holding
Corp.,
owner of 420 health clubs, cited similar problems when it reported a
58 percent drop in quarterly profit last August.
The Chicago company, which operates under its own name as well as
the Crunch and Gorilla Sports brands, said overall membership
revenue was down 9 percent for the quarter. It had also found it
difficult to sign up new members last year.
"A lot of it stems from the economy," said analyst Reed Anderson
of U.S. Bancorp Piper Jaffray. "Ultimately for Bally (customers),
it's a discretionary purchase."
A Roper Poll commissioned by Bankrate.com found earlier this year
that more Americans are concerned about paying off their debts than
they are about losing weight.
But consumers' financial concerns aren't the only obstacles for
fitness companies.
A Gallup Poll conducted last year said that just 24 percent of
U.S. adults were seriously trying to lose weight -- about the same
as in 1953.
Harvey Lauer, president of health and fitness research firm American Sports Data Inc., blames the pleasure principle: "80 percent of people believe in physical fitness, but only 20 percent are regular exercisers." SUCCESS STORY Still, while some companies are struggling, others are succeeding. Mind-and-body workouts such as pilates and yoga have taken over the knee-pounding aerobics and cardiovascular activities whose popularity peaked in the early 1990s, Lauer said. Heavy participants in these "kindler, gentler" activities are women over 55 -- the nation's single fastest-growing group of exercisers in the Unites States, he said. That trend could explain the standout success of Curves International, the women-only fitness center chain that Entrepreneur Magazine earlier this year called the fastest-growing franchise in history. "The conventional fitness industry is out there targeting 18-to-32-year-old men and women who are generally comfortable with the way they look. They had written off older women," Curves founder and Chief Executive Gary Heavin said in an interview. "Perhaps the most important key was that we created an environment that was comfortable." Privately held Curves has rocketed from its small-town Texas roots in 1992 to more than 6,000 clubs with 2 million members, by offering 30-minute low-impact circuit training for a low monthly membership fee of around $30. A new Curves opens about every four hours. Curves' unthreatening environment is "appealing to overweight, nonathletic women who've never done anything," Lauer said. Meanwhile, Heaney, the Maxim Group analyst, expects a growing sense of urgency and awareness about the obesity problem to eventually benefit companies like Weight Watchers. "To some extent they're getting free advertising," Heaney said. "I think it will feed through." |