Economy, fitness fads throw gym a curve

Curves franchise in Palo Alto illustrates trends in exercise, business

The Curves gym on Emerson Street was the first of its franchise to open in Palo Alto. Now it is the last one standing.

Curves International Inc. specializes in 30-minute resistance-training workouts for women. But in the past four years, a loss of nearly half of its U.S. franchise sites since 2007 illustrates the difficulty of maintaining a business amid changing demographics and fitness trends.

Curves' corporate communications confirmed that 4,400 branches remain, compared to 7,748 in the onset of 2007, according to a franchise-disclosure document filed with state regulators in March 2010.

Two sites closed nearby: the branch on El Camino Real in Palo Alto in April 2010 and the branch on University Avenue in East Palo Alto in 2007-08, a corporate employee said.

"Franchise trends come and go, and many of them have throughout the years. Franchises depend on demographics, consumer behaviors and economic trends," said Todd Lipton, president of Fitness Acquisition Inc. in Scottsdale, Ariz., a specialist in the sale of health clubs and fitness centers.

The success of Curves was unusual in the fact that it was simple and carried low start-up costs, Lipton said. An owner could open up a club using credit cards alone.

Curves gave working and non-working women the chance to become entrepreneurs when they otherwise couldn't, Lipton added, noting that the demographic of women buying Curves usually consisted of those not opting for the typical co-ed club.

"The allure of the Curves franchise for me was that they stood for empowering women: a no-make-up-or-hair-do-required kind of place providing a comfortable and safe environment for women to get fit," said Susan Empey, owner of the Emerson Curves.

One of the reasons for the Curves closures, Lipton said, is that the proliferation of franchises quickly saturated the market. Then there's the recession.

"We are seeing consumers lose purchasing power. Because they have less spendable income, they are being more frugal, willing to go with fewer services, amenities, and the market is responding," Lipton said.

"There has been a dynamic shift in the market. The up-and-coming franchises and licensing companies that we see now are priced (for membership) on the lower end of the spectrum, as low as $10-19 a month," he said, adding that the mid-market clubs charging around $40 to $65 are currently hurting the most. Curves currently charges about $44 a month, a few dollars more or fewer depending on services.

Butterfly Fitness Inc., a mid-market Curves competitor offering workouts for women, will be closing its Middlefield Road branch in Palo Alto on April 15.

"Butterfly's Fashion Island branch closed a few years ago. I'm sad to see ours go now. The economic situation is leading to membership declines," said Butterfly Assistant Manager Candy Losacano. The club required a few hundred members to sustain itself as a viable business, she said.

Exercise trends themselves come and go, contributing to the growth or demise of businesses. Natalia Jaster, assistant editor of "American Fitness" magazine, cites Zumba, a cardio workout involving salsa and Latin dancing, as the most current trend.

"It's easy and fun, and people like to dance in a group," Jaster said. Also gaining popularity, she added, are hybrid fitness, which features combination exercises such as koga (yoga and kickboxing); Aqua Zumba; and the elliptigo (a running and cycling device).

The Curves gym on Emerson is adjusting to rising trends by including Zumba in its work-out program for a small fee. Even so, financial hardship is still being felt.

"Owning this business has had its ups and downs. People are losing their jobs, and exercise to some may have become a non-essential expense," Empey said.

Curves club member Anna Richert of Menlo Park said that some may have walked away because they were paying but not going to the gym.

"We are really hoping to save this wonderful place. It's convenient -- only a half-hour workout, plus you get the bonus of a community of lovely older ladies wanting to stay active," she said.

"I drive all the way from San Francisco to come here three times a week. Exercise is as important to me as medication," club member Debby Fife said.

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Like this comment
Posted by Butterfly Life Member
a resident of Midtown
on Mar 12, 2011 at 5:01 pm

Posted by Butterfly Life Member, a resident of the Midtown neighborhood, 4 hours ago

Thanks for the article.

I do think that you are giving the wrong impression with these gyms (at least Butterfly Life, as I have no experience of Curves) that these women's gyms are for "older ladies". As a Butterfly Life member in my 50s, I do not consider myself in the "older lady" category although there are many members in the 70+ age bracket. There are many women my age and younger including some teenagers, all who prefer a women's gym with pleasant decor, pleasant and varied background music, and the opportunity to meet a diverse group of people while exercising. The machines are sized for women and the atmosphere is very different to places like the Y, JCC, 24 hour fitness and Gold's Gym, all of which are being looked at by the members as alternatives but not suitable replacements.

If any investor were to take on Butterfly Life in Midtown and be willing to invest in advertising and promotions, the present members would be thrilled. There is plenty of room for more and we are willing to stay.

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Like this comment
Posted by Butterfly life member
a resident of Midtown
on Mar 12, 2011 at 8:32 pm

It is very sad that Butterfly Life in Midtown will soon be closing. I t is a wonderful women's gym for ALL ages. The gym has excellent machines & a large room with a variety of equipment & videos for exercising and stretching.
The staff are very friendly and caring and it is such a pity this gym will be closing when it was voted as the Best Women's Gym in Palo Alto for 2011.

2 people like this
Posted by Fit Dude
a resident of Palo Alto Hills
on Mar 14, 2011 at 7:53 am

The fact that many Curves owners got into the business by maxing out their credit cards does not speak highly of the Curves screening system- they sold clubs to anyone who could come up with the money regardless of background or financial stability. Thousands of Curves clubs have closed in the last few years. Curves club owners blame the corporate office for lack of support, over-saturation of territories, high franchise fees and inferior equipment. For club owner comments, see: Web Link

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