MUST READ: Club Industry’s Annual Top 100 Clubs List.

Club Industry’s Annual Top 100 Clubs List

The momentum to the top spot on Club Industry’s annual Top 100 Clubs list has been building over the last two years for LA Fitness.

The Irvine, CA-based company, now technically named Fitness International LLC, made its biggest splash in 2011 when it acquired 171 clubs from Bally Total Fitness, Chicago. LA Fitness followed that major acquisition with two more acquisitions of regional club companies in 2012. First, there was the acquisition of the remaining 32 clubs in Florida from Lifestyle Family Fitness, St. Petersburg, FL. Later in the year, LA Fitness purchased all 36 clubs from Urban Active, Lexington, KY.

LA Fitness also has been steadily adding clubs through greenfield development. A source told Club Industry that LA Fitness had 568 clubs at the end of 2012, a huge jump from the 505 clubs that the company had at the end of 2011.

By Club Industry’s estimates, LA Fitness is the new No. 1 revenue-generating club company in the industry, surpassing 24 Hour Fitness, San Ramon, CA, which held onto the No. 1 spot for nine consecutive years. The Top 100 Clubs list ranks club companies by revenue in the previous year and is not intended to rank clubs based on quality or service.

Club Industry estimated LA Fitness with $1.7 billion in 2012 revenue. (The company declined to disclose actual revenue figures.)

“With LA Fitness, it’s been a combination of new builds and acquisitions,” says Rick Caro, president of Management Vision, New York. “It’s not just one instead of the other. Despite the closings of some of the acquired clubs, in particular some of the Bally clubs, the net increase is still phenomenal.”

24 Hour Fitness reported that it had more than $1 billion in revenue and more than 400 clubs at the end of 2012. Club Industry estimated 24 Hour Fitness to have $1.5 billion in 2012, the same estimate Club Industry gave 24 Hour the previous year. Although 24 Hour did publicize new club openings and investments in established clubs throughout 2012, 24 Hour also announced last August it had sold all 18 of its California Fitness clubs in Asia.

Forstmann Little, the parent company of 24 Hour, put the company on the market in 2012. But at year’s end, 24 Hour announced that Forstmann Little had taken 24 Hour off the market.

The uncertainty surrounding the company carried over into this year. In March, 24 Hour announced a dozen layoffs within the corporate office. A couple of months later, President and CEO Carl Liebert announced his resignation, taking an executive position with USAA Capital Corp., a San Antonio-based financial services company.

Life Time Fitness, Chanhassen, MN, once again is No. 3 on Club Industry’s Top 100 Clubs list with a reported $1.127 billion in 2012 revenue, an 11 percent increase from 2011. It was the second year in a row that the publicly held company surpassed the $1 billion mark in revenue. Life Time Fitness also got into the acquisition game in 2012, purchasing nine clubs from Lifestyle Family Fitness as well as Atlanta’s Racquet Club of the South.

Club Corp., Dallas, is No. 4 again on the Top 100 Clubs list with $754.9 million in 2012 revenue. Town Sports International (TSI), New York, another publicly held company, rounds out the top five on the list with a reported $479 million in 2012 revenue, a 3 percent increase from the previous year. XSport Fitness, Big Rock, IL, is No. 6 with a reported $165 million in 2012 revenue, a 10 percent increase from the previous year.

After a year away from the Top 100 Clubs list, Planet Fitness, Newington, NH, makes its return at No. 7 with a reported $157.3 million in 2012 revenue. Last year, private equity firm TSG Consumer Partners acquired a major stake in Planet Fitness. Co-founder Mike Grondahl told Club Industry last year that he and partners Chris Rondeau and Marc Grondahl would retain a 25 percent stake in the company. Earlier this year, TSG Consumer Partners announced that Mike Grondahl had stepped down as CEO, replaced by Rondeau.

Western Athletic Clubs, San Francisco, is No. 8 on the list with $135 million in reported 2012 revenue. With 11 clubs, the company has one of the highest revenue-per-club ratios in the industry. Crunch Fitness, New York, is No. 9 with a reported $113 million in 2012 revenue.

Despite selling a number of clubs and seeing a huge drop in revenue, Bally still made the top 10 on this year’s Top 100 Clubs list. Bally reported $108 million in 2012 revenue after the company reported $468 million in 2011 revenue. The drop in revenue resulted in Bally only falling five spots from No. 5 on the list. Bally, which had 53 clubs in operation at the end of 2012, now has 43 clubs, most of which have become high-volume, low-price clubs.

Sport and Health, McLean, VA, is the last club on the list that has $100 million or more in revenue. Sport and Health is No. 11 with a reported $103 million in 2012 revenue.

Millennium Partners Sports Club Management, Boston, which owns the Sports Club/LA clubs, is No. 12 with a reported $96 million in 2012 revenue. Millennium Partners had an estimated $94.8 million on last year’s list.

No. 13 is Midtown Athletic Clubs and Midtown Health, Chicago, which reported $91 million. Leisure Sports Inc., Pleasanton, CA, is No. 14 with $89 million in reported 2012 revenue, and PFNY LLC, Yonkers, NY, a Planet Fitness franchisee, is No. 15 with a reported $82 million in 2012 revenue.

Two of the leading all-access club companies, Anytime Fitness, Hastings, MN, and Snap Fitness, Chanhassen, MN, continue their rise on the Top 100 Clubs list. Anytime Fitness cracks the Top 20 for the first time at No. 19 with a reported $52.6 million in 2012 revenue. Snap Fitness is not far behind at No. 21 with $48.6 million in 2012 revenue. Anytime Fitness was No. 31 and Snap Fitness was No. 34 on last year’s Top 100 Clubs list.

“The continued growth of the franchised companies, in particular the 24/7 all-access clubs, is very strong again,” Caro says. “Planet Fitness obviously was strong.”

Rounding out the top 20 are No. 16 Club One, San Francisco, with $80 million in reported 2012 revenue; No. 17 The Wellbridge Co., Greenwood Village, CO, with a reported $76 million in 2012 revenue; No. 18 East Bank Club, Chicago, with a reported $55 million in 2012 revenue; and No. 20 Spectrum Athletic Clubs, El Segundo, CA, with a reported $50 million in 2012 revenue. Despite its decrease in revenue, Spectrum Athletic Clubs fell only five spots from No. 15 on last year’s list, when it reported $90 million in 2011 revenue. Spectrum also decreased in size from 23 clubs to 12 clubs after Gold’s Gym International, Irving, TX, acquired its 11 San Antonio-area clubs last year.

Changes to the Top 100 and List