24 Mar 2016
A Fitness Industry Innovator Powers On
How Leonard Schlemm (MBA 1978) turned a $45,000 investment into the world’s largest health-club chainTopics:
Photo by Graham Hughes for National Post
Monthly dues and 24-hour club access are nothing unusual in the world of fitness—but when Leonard Schlemm bought the San Francisco Bay Area Nautilus club in 1983 for $45,000, members were required to sign 3-year contracts and could only use the facilities at appointed times. Changing that—and rebranding the club, and those that followed, as 24 Hour Fitness—would alter the industry forever, with 24 Hour Fitness growing to 420 clubs, 20,000 employees, and over $1 billion in annual revenues.
“In the fitness industry, there are very major economies of scale on a regional basis,” Schlemm told Canada’s Financial Post. “In a given market, the key to financial success was being the dominant player.”
Class of MBA 1978, Section C