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Used Fitness Equipment Entices Some Club Operators during Recession

OVERLAND PARK, KS — During a recession, some club operators turn to used and refurbished equipment in hopes of saving money, but whether that trend is holding true in this recession depends on whom you ask.

“People are looking at different ways to save today, and in terms of used equipment, it's one of the first things people look at,” says Bryan Green, president and CEO of Culver City, CA-based Advantage Fitness Products, a company that plans, designs, supplies and supports specialized fitness and wellness centers.

However, Green says he hasn't worked with any operators looking to buy equipment from distressed clubs. In fact, he says that club operators aren't buying any equipment right now — new or used. Instead, they are extending their equipment leases, which has caused a glut of used equipment.

Some equipment brokers and refurbishers agree that used inventory is high, but so is demand for it, they say.

“The used equipment business is about supply and demand,” says Chris Creighton, vice president of sales and marketing for Atlas Fitness Systems, a 25-year-old refurbishing company headquartered in Riverside, NJ. “Right now, demand is really high. We are actually moving half of what we are doing to brokers right now because they can't get it fast enough…because the demand is high.”

The majority of used equipment that Atlas Fitness moves and refurbishes comes from operators who are replacing it with new equipment after expiration of their equipment lease, Creighton says. He also sees inventory from closed clubs.

Customers for used equipment often are operators of new clubs who can't get financing for all new equipment, so they mix used equipment with new, he says, adding that the savings on used equipment can be 40 percent to 60 percent. However, Green says that with the recession, manufacturers have been more aggressive in pricing new equipment, which means the savings on used equipment may not be as high as it once was.

About 65 percent of the used equipment that Creighton deals in is cardio equipment, since new models of cardio are introduced more frequently than strength equipment.

Eddie Tock, president of Eddie Tock Health Club Sales and Marketing Consulting, Garrison, NY, says used strength equipment is a better option than used cardio because of cardio equipment's higher wear and tear factor and shorter lifespan. Also, manufacturer warranties often don't transfer to the new owners.

However, Creighton says that if the product was on a lease, it was probably serviced regularly, and manufacturers may be more willing to transfer warranties these days. If the original manufacturer won't transfer the warranty to the new owner, Atlas Fitness will sometimes honor the warranty — depending on the equipment's age and purchase price.

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