IRVINE, CA -- Nearly three months after letting go about 100 employees, Star Trac recently underwent another round of layoffs.
Star Trac President Mike Leveque confirmed that the Irvine, CA-based company let go eight to 10 members of its U.S. sales division two weeks ago. Leveque says this was part of Star Trac’s domestic sales strategy execution under the direction of Larry Domingo, vice president of global sales.
“The strategy is focused on leveraging direct and distributor channels to ensure the most efficient and complete national coverage,” Leveque said in an e-mail to Club Industry. “The new strategy requires fewer direct sales staff and, consequently, some positions held by tenured sales professionals were eliminated. We did not take these decisions lightly and wish the former members of our team the best in their future endeavors. Going forward, we are committed to continue to look for opportunities to become a more efficient company. We owe this to our customers in order to keep cost down and service levels high.”
As part of Star Trac’s plan moving forward, the company’s core competencies, Leveque says, will be centered on customer-focused, value-added activities. Those activities are to design and develop high-quality, differentiated products, to improve class distribution and to offer a world-class customer experience, he says.
“As we re-establish Star Trac as a leader in the global commercial fitness equipment industry, we will be directing our efforts in these areas,” Leveque says.
In June, Star Trac laid off 100 employees, half were office staff and managers and the other half were from the company’s strength factory. At the time of the layoffs, Randy Bergstedt, then the company’s vice president of marketing, said the company did not plan to do any more staff reductions, particularly at the senior staff level of the company. Bergstedt has since moved on to become the executive vice president at efi Sports Medicine, San Diego.
In July, Michael Bruno, owner of Land America Health and Fitness Co., purchased Star Trac. Land America has a manufacturing plant in Xiamen, China, which will be an asset for Star Trac, Leveque says.
“One of the benefits of having an owner who has an 800,000-square-foot Chinese manufacturing plant is to leverage this resource to simplify and gain efficiency in our supply chain,” Leveque says. “We will continue to explore ways to use this as a competitive advantage.”
Leveque took over as president of Star Trac for Steve Nero, who resigned in May. Ironically, Nero has become a consultant for Bruno.
The bond between Nero and Bruno grew when Star Trac established its manufacturing relationship with Land America’s plant, Bruno says. Once Nero left the company, he suggested to Bruno that he explore the possibility of buying Star Trac.
“From that point forward, I relied on information from Robert W. Baird and Co., Star Trac’s investment bank, and Star Trac’s management to direct my acquisition efforts, which ultimately proved successful,” Bruno said in an e-mail to Club Industry.
Bruno says Nero has a short-term consulting agreement with one of Bruno’s companies, Primus Medical, Boardman, OH, to assist in the development of its medical products. (Boardman is just south of Bruno’s native Youngstown, OH.) A role at Star Trac is not in Nero’s future, Bruno says.
“[Nero] has no role, nor is it anticipated that he will ever participate, in the current or future management of Star Trac,” Bruno says.
Mark Mastrov, co-founder of New Evolution Ventures (NEV), Lafayette, CA, says he met with Bruno and his Star Trac team two weeks ago. Mastrov’s ties to Star Trac go back to 1990 during his days at 24 Hour Fitness, which purchased its first treadmills from Star Trac in 1991. NEV operates Crunch and UFC Gym.
“We are excited with Michael’s vision and passion for the industry,” Mastrov says. “We talked about everything from current parts issues to their ability on delivering new product. I am now very confident that they will perform and do what they say they are going to do and come out of this difficult time a much stronger and better company.”