October 5, 2007

Home Gyms Become a Growth Industry

Having a home gym used to be as simple as buying an exercise bike and sticking it in the corner of the basement.

But as Americans place more emphasis on fitness, they are digging deeper into their wallets for state-of-the-art home gyms.

Sales of exercise equipment jumped from $4.4 billion in 2005 to almost $4.7 billion in 2006, according to the Sporting Goods Manufacturers Association.

There's no end in sight for the escalating sales.

That's good news for personal trainers, gym chains and nutritionists. And it's encouraging for guys like Ron Batca.

For 18 years, the Raleigh resident has designed and sold fitness systems to gyms and clinics.

Now he's finding the home-gym customer to be an untapped source of sales. He estimates that 30 percent to 40 percent of his sales are to fitness buffs who want to work out at home.

"When we first started, there were only a few homes where we'd do it, and the exercise room was in the dark corner," he said. "In the last year or so, they are designed like commercial gyms that fit in homes."

Despite his popularity among health professionals and his growing presence in the home gym market, Batca said most people don't know that he's based in Raleigh.

"I think a lot of people feel like all exercise equipment comes out of California," he said. "But if you go to a rehab clinic, you'd probably have a 90 percent chance of seeing our equipment."

Locally, WakeMed and Duke University use Batca products in their rehabilitation clinics.

The systems are easy-to-use, space-efficient and, most importantly, dependable, said Jay Goodman, a physical therapist at WakeMed's outpatient physical therapy clinic on Wake Forest Road in Raleigh.

"I've worked with it for six years and have had no mechanical breakdowns," he said. "I've even had patients ask where they could get one for their homes. I didn't know they were here."

Celebrities sweat

Batca -- or more accurately, his equipment -- has had a few brushes with fame.

Batca Fitness Systems machines were used in the Olympic Village in Greece. And he even spotted one of his machines in Russell Simmons' house on an episode of "MTV Cribs."

"It's not like we make our living on that," he said. "But it was nice."

Not bad for a company with 10 employees based in a small warehouse off New Bern Avenue in Raleigh. Batca declined to reveal his company's revenue, but he has plenty of opportunity for sales. Batca Fitness Systems makes more than 40 exercise machines, some costing as much as $7,000.

That kind of price is becoming more reasonable to people accustomed to the high-end equipment in commercial gyms, said Kerri O'Brien, spokeswoman for Life Fitness, which is a division of Brunswick Corp.

"They want to experience that same solid, gym-quality feel at home," she said. "These demands have driven the quality of today's home gym equipment upwards. Pieces are sturdier, better looking and come equipped with sharper features."

That demand translates into change for home builders, too, including Pulte Homes.

At Carolina Preserve, a development in Cary for homeowners 55 and older, Pulte is installing a full fitness center with more than 50 pieces of state-of-the-art equipment, said Steve Schlageter, president of Pulte's Raleigh division.

"It is a huge selling point," he said. "We're finding that fitness is a big part of the buyer's needs. This stuff is becoming more and more expected."

Soloflex feels the burn

But with so much sales growth and demand, there is more competition, said Jerry Wilson, who founded Soloflex in 1978.

"There was no competition when we first started," he said. "Now there are companies that are pushing a billion dollars a year."

Wilson declined to disclose Soloflex's sales but said increased competition has caused sales to level off. Many manufacturers have moved production overseas to trim costs, though Soloflex still manufactures its machines in Oregon.

"Our peak years were before 1995," Wilson said. "We've been cruising since then."

Though his company is much smaller than Soloflex, Batca has also made the move to China.

Pumping up in China

Now, 14 of his 42 products are made in China, though he has kept the production of his most popular items and his research and development in Raleigh.

"For us, it was something that was part of our growth plan," he said. "Of course, we are doing it so we can compete."

He said operating in China requires stringent quality control, and he takes several trips to the country each year to ensure his standards are being met.

"I would never dream of sending [blue]prints to the floor without checking on it," he said.

He hopes that sales continue to expand as he moves into other areas of fitness.

"There's a growing number of companies putting fitness equipment in, what with health-care costs, keeping people's energy up, people being out sick less," he said. "There are lots of possibilities."

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