Last night I learned that Bally Total Fitness, a health club of which I am a member, is bankrupt again. Last year’s bankruptcy reorganization, it seems, just made things worse. The future of the location I go to, and the rest of the chain, is uncertain at this point. The bankruptcy court is allowing it to continue to operate for this week at least.
Bally was the top fitness club in the world when I joined it. If I had to guess at what brought it down based on what I’ve seen of it, it would be the emphasis it started to put on personal trainers about 6 years ago.
It’s easy to see why Bally might put such an emphasis on personal trainers. If customers start paying an hourly rate to get fit, it adds up much, much faster than the yearly membership fee. It must have seemed like a terrific profit opportunity. Most members, of course, could not afford the fees of a personal trainer, but if just a tenth of members would sign up for personal training, those fees could bring in more revenue than the membership fees. Yet personal training really doesn’t go together with the basic concept of community that defines a fitness club. The most egregious clash had to do with exercise classes. The club was so keen on getting people to pay for its personal trainers that it canceled most of its classes and suggested that people sign up for personal training instead. That was when things started to spiral downward.
Nearly half of the members had joined in order to attend the classes. Yet aerobic dance, to take just the most familiar example, is hard to do. It is hard to learn, it takes a high level of energy and concentration to do, and it is not always easy to get yourself off the sofa and over to the club for the class. When there was only one aerobic dance segment a week, not even a whole class, but a half-hour segment of a one-hour class, and 50 students were packed into an exercise room that only really holds 35 for an activity as energetic as aerobic dance, it made the aerobic dance not only hard to schedule but somewhat dangerous to do. People don’t join a health club for the chance to get injured.
In its bankruptcy filing, Bally says it lost money this year because of declining memberships. With members leaving one by one, and few new members signing up, there weren’t so many people to try to sell the personal trainer concept to. I don’t really know what has been going on across the whole chain, but from what I could see, it seems as if Bally killed off the core of its business by trying to add an extra profit center that really didn’t fit.
Bally accelerated its decline by sharply raising membership fees at the same time it was cutting services and its trainers were edging its regular members out the door. From what I am reading in blogs, the Bally Total Fitness brand is pretty well shot. “I am so glad I am not going to Bally anymore” seems to be the gist of the sentiment out there, which means that the top brand in the field, a place that people were excited to go to five or ten years ago, has fallen pretty far.
Bally management seems willing to give up the brand by selling the entire chain to someone who would rebrand it, and perhaps that is the best approach at this point. When you’re in your second bankruptcy in two years, the bankruptcy judge needs to see a commitment to change. If Bally could be turned around in its current form, it would have to be based on a commitment to a level of service. The strategy of continually raising prices while cutting services until there is almost nothing left doesn’t make customers feel good about paying for another year. But it is possible to change that by making a commitment to a level of service that customers can accept.
