LA Fitness gym chain acquires Lexington-based Urban Active

ssloan@herald-leader.comNovember 13, 2012 

National health club company LA Fitness has completed its acquisition of Lexington-based fitness chain Urban Active.

LA Fitness is honoring membership agreements at the same rates and payment plans as Urban Active, according to a statement issued by the companies.

Financial terms of the deal have not been disclosed.

A spokeswoman for LA Fitness did not return multiple messages left for comment. A spokeswoman for Urban Active declined a request to interview founder Royce Pulliam.

LA Fitness said in a statement that "many of Urban Active's employees have accepted positions with LA Fitness."

Trade publication Club Industry ranks LA Fitness as the second-largest health club chain in the United States, with an estimated $1.2 billion in revenue in 2011. The company, based in Irvine, Calif., has more than 500 gyms in 22 states, according to its website. Before the acquisition, it had one gym in Kentucky: in Northern Kentucky's Crescent Springs.

By contrast, Urban Active ranked ninth with an estimated $107.5 million in revenue in 2011, according to Club Industry. The company had 36 gyms in Kentucky, Georgia, Nebraska, North Carolina, Ohio, Pennsylvania and Tennessee, according to its website. Of those, one has closed as part of the deal. LA Fitness closed the 27,000-square-foot Urban Active in Mason, Ohio, and moved that gym's members to a nearby 50,000-square-foot LA Fitness gym in Symmes, Ohio.

Urban Active was formed in 2007, when Pulliam, a Lexington businessman, pulled his 25 fitness centers out of the Gold's Gym chain. He rebranded the clubs that were in Kentucky, Tennessee and Ohio as Urban Active Fitness, reflecting his admiration for Richard Branson's Virgin Active Health Clubs in Great Britain.

The deal is the latest in a series of acquisitions by LA Fitness, said Stuart Goldman, managing editor of Club Industry.

The company bought 171 Bally Total Fitness Clubs in 16 states last year, and 32 Lifestyle Family Fitness clubs in Florida earlier this year, Goldman said. Club Industry reported that LA Fitness tried to buy Urban Active last year, but the deal fell through.

"There's going to be some issues," Goldman said of the transition to the new company. "Members have to have some patience going through all that."

He said LA Fitness is a mid-priced leader in the industry.

"We're seeing a lot of high-end, high-priced clubs; then there's ones like Planet Fitness that are $10 a month and high-volume, low-price," he said. "Right in the middle of that is LA Fitness."

(Lexington's first Planet Fitness club is scheduled to open soon in the Kroger shopping center at Bryan Station and New Circle roads. Planet Fitness is based in Newington, N.H., and has hundreds of gyms nationwide.)

Customer-service problems for LA Fitness appear to be less pronounced than with Urban Active, which has come under strong criticism in recent years because of billing problems.

LA Fitness received a rating of "A+" by the Better Business Bureau, according to the BBB's website. Before the acquisition, Urban Active had a rating of "C," up from an "F" that the company received last year.

Urban Active recently agreed to settle a lawsuit over billing practices in Northern Kentucky. That case was filed in 2009 after the plaintiffs had canceled their memberships but money continued to be withdrawn from their bank accounts. Attorneys in the case said the fitness chain made canceling memberships difficult for numerous customers.

Scott Sloan is a member of Urban Active: (859) 231-1447. Twitter: @HeraldLeaderBiz.

Lexington Herald-Leader is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service