Cutting
an Edge in Fitness
by Melissa
Wells
Lifestyle Family Fitness Centers have soared in business.
Melbourne,
Australia-native Geoffrey Dyer is carving a nice piece of
the American dream for himself. His self-assured handshake
and friendly smile have as much to do with the success of
Clearwater-based Lifestyle Family Fitness LLC as a solid
business plan that has attracted more than $6 million in
venture capital financing to accelerate growth.
Dyer's
journey from Australia to Florida's Gulf Coast came early
in life, at age 22, when he traveled the world with his
father. In the course of that trip in the early Œ70s, a
visit to family friends in Oklahoma City led to a job that
provided the gateway to his career. "They hired me as a
fitness instructor for $100 a week at their gym," Dyer says.
"It was an exciting opportunity to work in America. And
I was a good fit for the fitness industry. I quickly worked
into club management."
 |
Geoffrey
Dyer, president at St. Petersburg-based Lifestyle Family
Fitness Centers, is a leading force in the Tampa Bay
area's and the nation's fitness industry.
Photo: Robin Donina Serne |
change
in ownership of the fitness center a year later led to Dyer's
choice to relocate to the Tampa Bay area. He managed four
fitness centers in Clearwater owned by J. P. Davenport and
in 1981 was recruited to a Lakeland gym. "Jack Hall was
a home improvement guy who bought a club in Lakeland and
brought me in as a 49-percent partner," says Dyer.
Dyer
drew from his native culture for the name of that facility,
Lifestyle Fitness Center. "Ron Clarke, the Australian long-distance
runner, introduced the Lifestyle name in Australia," explains
Dyer. "He gave us permission to use the name in America."
That club, at 5,200 square feet, attracted 2,400 members
in its first year. In 1985 Dyer bought out Hall's ownership
in the business and built a second facility in Winter Haven.
Six years later American Fitness Center sold its Brandon
facility to Dyer. "It was a big step at the time," Dyer
says. "At 25,000 square feet, it was bigger than what I
already owned. We doubled our company overnight. But it
was very successful."
The next doubling of Lifestyle occurred in 1995 when Bally
closed three of its seven health clubs in the Tampa Bay
market. Although Dyer had tried to negotiate a deal with
Bally to take over the facilities, "we were unable to agree
on terms," he says.
When
Bally closed its facility in the Tyrone area of St. Petersburg,
Dyer opened the space the next morning as a Lifestyle Family
Fitness Center. "One hundred seventy-five people joined
the first day," he says. "It was tremendous to see such
participation."
That
was a busy week for Dyer, who had also opened a second Lakeland
facility. "We again more than doubled the company that week,"
he says. "Fortunately it was a good decision.
In 1998
Dyer reopened the Seminole club, again a former Bally facility.
"Each time I got the option to buy the property with each
lease," he says. "I was able to buy the land under our sites
in Brandon, downtown Lakeland and Tyrone. I bought all this
and didn't have any mortgage. That is the American dream
to buy such an enormous piece of real estate and be able
to pay it off."
In addition
to buying the land, Dyer also expanded his original facilities.
"I believe in reinvesting in clubs for my members," he says.
At that
time Dyer received word that a major competitor from California
planned to open fitness centers in the Tampa Bay area. "Ray
Wilson is quite a legend," says Dyer. "He has opened more
than 600 clubs. He built totally loaded mega clubs and we
were hodge podge. I was threatened by his coming in this
market."
Rather
than tuck tail and run, Dyer took the initiative to call
Wilson. That was the beginning of a business arrangement
that is still in place. "We agreed to provide back office
operations for his facilities and he agreed not to compete
in Pinellas County," says Dyer. "And we wouldn't compete
in Hillsborough."
Wilson
assumed the Lifestyle moniker for his facility in Tampa,
which is now managed by Dyer's firm. And Dyer assumed Wilson's
"pay as you go" model for operating fitness centers. "In
June 1999 we switched to month-to-month memberships," says
Dyer.
Last
year while Dyer was preparing to open another fitness center
in Largo, he was approached to sell the business. "Fitness
has been promoted by the Surgeon General and acquisitions
have started to occur," he says.
Dyer
turned to John Simmons Jr. and Stuart Lasher at Quantum
Capital Partners for advice on what to do. "I asked if I
should sell or stay and manage the business," he says. "They
showed an interest in Lifestyle and offered debt financing
to grow the company."
The
Tampa-based venture capital firm invested $3.25 million
in Lifestyle. "They required that they be able to guide
the company through this growth," Dyer says.
The
first step led to expanding the management team and relocating
the company's headquarters from a 5,000-square-foot office
in Tampa with 19 employees to a 15,000-square-foot office
in the Gateway area of St. Petersburg with 40 employees.
"We added vice presidents of marketing, sales and construction
and a controller," Dyer says. "We added $1 million in overhead."
As part
of that expansion, Lifestyle built four new clubs last year.
"We have 775 employees now and 12 fitness centers," says
Dyer. "And two sites are under construction, including our
first club in the Orlando market. Our goal is to add four
to six clubs per year."
In November
Quantum provided a $6.25-million capital infusion into Lifestyle,
converting the previously funded money of debt into equity
and investing an additional $3 million. "They have become
partners," Dyer says. "I maintain control but they have
a large equity stake in the company and are on the board
of directors."
Stuart
Lasher, chairman at Quantum Capital Partners, is a former
CPA with KPMG who has gone on to create a professional employee
organization that Paychex acquired in 1996. "I've had experience
growing a business," Lasher says. "What goes along with
that is developing a good management team. We evaluated
the Lifestyle organizational structure and brought in a
strong CFO, Todd Bright, who has done a terrific job. Now
with the right management team in place we're getting the
company ready to handle the next round of growth.
"I met
Geoff in 1990 when he had a couple of clubs," says Lasher.
"He's very bright, understands this industry very well and
is a good leader. This is a good fit."
Another
of the investors with Quantum is Tampa Bay Buccaneer Pro
Bowl fullback Mike Alstott. "As an athlete I have a strong
interest in the health and fitness industry," says Alstott,
"and as a long-time member of Lifestyle I have firsthand
knowledge of the high quality and service of the fitness
centers."
With
14 locations, 60,000 members and annual revenues of $17
million, Lifestyle has been ranked 8th among the Top 25
fitness clubs throughout the world in terms of growth of
revenues by the International Health & Racquetball Sports
Club Association (IHRSA). Club Industry magazine last year
ranked Lifestyle 43rd in the Top 100 fitness centers in
the nation.
In addition
to state-of-the-art cardiovascular and strength training
equipment, Lifestyle offers special programs such as Pilates,
yoga, aerobics, martial arts, Body Pump and spinning classes.
The NetPulse cardiovascular equipment includes personal
televisions and CD players and provides connections to the
Internet. Monthly membership dues range from $20 to $40.
An innovation
by Dyer has been partnering with Bayfront Health & Wellness
Center to offer its services at Lifestyle facilities. "They
offer fitness testing, body fat testing and flu shots,"
says Dyer. "It's better for them to partner with a commercial
facility with all the bells and whistles and it's another
opportunity for us to provide services to area residents."
As Lifestyle
adds locations throughout the Tampa Bay area, Dyer plans
to recruit more corporate accounts. "We can be a one-stop
shop for employees of large corporations," he says. "Companies
are heavily incentivizing their workforce to get involved
in fitness."
An IHRSA
publication, The Economic Benefits of Regular Exercise,
cites that more companies are implementing corporate fitness
and wellness programs by subsidizing health club memberships
and providing programs on stress reduction, nutritional
counseling, smoking cessation and weight management. The
study indicates that results of such programs can provide
100- to 300-percent returns in five years by reducing lost
productivity, absenteeism and hospital stays.
"Given
the age of baby boomers, fitness has become a key component,"
says Lasher at Quantum Capital Partners. "This is about
quality of life."
Meanwhile,
Dyer and Lasher are preparing to add 35 to 40 Lifestyle
centers in five years. "Our goal is to take the company
public," Dyer says. "First we must increase revenues above
$60 million. We can open more than four to six clubs a year.
It's just a matter of finding the right sites. It's a challenge
finding the space."
In addition
to leading the future of Lifestyle, this year Dyer is president
of IHRSA, an aggregation of 6,000 health and fitness centers
around the world. "Geoff is one of the top leaders of this
industry," says Ray Wilson, who is renowned as one of the
originators of the modern fitness industry. "He started
from scratch and learned the whole industry. He's very progressive.
It's just natural that he became president of IHRSA."
In reflecting
on his successes in the fitness industry, Dyer cites his
membership on the Faust Roundtable, an executive group comprising
16 club owners worldwide, as quite influential. "I owe a
large part of my success to the roundtable," he says. "We
share all our information and help each other become better
operators. They've given me great advice."
The
other great opportunity has been learning the industry from
Ray Wilson. "He's been so successful in building his companies,"
Dyer says. "Then to meet him and have the opportunity to
work together has been fantastic. I owe him a great deal."
