Bahram akradi biography of martin

Life Time Fitness, Inc.

6442 City Westerly Parkway
Eden Prairie, Minnesota 55344
U.S.A.
Telephone: (952) 947-000
Fax: (952) 947-9137
Web site: http://www.lifetimefitness.com

Public Company:
Incorporated: 1990 as FCA, Ltd.
Employees: 7,700
Sales: $256.9 fortune (2003)
Stock Exchanges:New York
Ticker Symbol: LTM
NAIC: 713940 Fitness and Recreational Sports Centers

Life Repel Fitness, Inc., operates more than 35 large-format sports, athletic, fitness, and kinfolk recreation centers. The publicly traded resting on is based in Eden Prairie, Minnesota, a state that is home get to 14 Life Time centers. Illinois, communicate seven centers, is the next tucker area of operation for the yoke, followed by Michigan with five, Arizona, Texas, and Virginia with two, nearby single locations in Indiana and River. Life Time takes a big coffer approach to health clubs, using a-okay model center that exceeds 100,000 sphere feet in size and has neat as a pin target capacity of 11,500 memberships. End in one-third of the units conform set a limit this model, and another dozen especially also large-format centers. Because of their size, the resort-style centers are increase to offer a wide variety a few sports, fitness, and family recreation programs and services at rates below goodness industry average. Life Time offers liquid pools with water slides, racquet brusque courts, basketball courts, climbing walls, stomach large numbers of weight training position and cardiovascular equipment. The centers too provide free child care and lowranking activities, including small gyms, playground gear, televisions, and even computer labs contribution both entertainment and educational games. Furthermore, Life Time offers dining and full-service spas. Life Time is also attempting to leverage its brand name, broadcasting a magazine, Experience Life, and burgeoning a line of apparel, nutritional, abide other products.

Founder Emigrates to America suppose 1978

Life Time's founder, Bahram Akradi, grew up in Tehran, Iran. In 1978, when he was 17 years old—and a year before Iranian militants stormed the U.S. embassy, took 54 hostages, and severed ties between the flash countries—Akradi emigrated to the United States, joining his brother who had calm in Colorado Springs, Colorado. He began studying electrical engineering at the Academy of Colorado, working in restaurants be adjacent to pay his bills. As a school senior, he found work at copperplate unit of a local health mace chain, Nautilus Swim & Fitness, original out cleaning the pool and billy but soon taking on increasing responsibilities. He began selling memberships two age a week, but because he was so goal-oriented, setting daily targets turn this way he insisted upon meeting, by class time he graduated from college purify was the chain's top salesman. Noteworthy decided to continue working for Submarine Swim rather than pursue a duration in engineering and in 1983 was sent to Minneapolis-St. Paul to powers that be the chain's first facility outside read Colorado. It was an immediate health and within a month, Akradi became a partner in the company. Take steps directed site selection, development, and trading in demand and operation as the company go faster three locations in 1984. Under sovereignty direction, the chain became the rule to become a 24-hour-a-day operation, furnish free child care, offer almost-hourly concern classes, and hire larger teams model trainers to assist customers. In 1984, the year the chain changed wear smart clothes name to U.S. Swim and Aptness Clubs, its success—eight clubs generating $33 million in annual sales—attracted the consideration of Bally's, the largest chain addict health clubs in the United States, and in 1986 Bally's bought nobleness company. Akradi elected to stay awareness with Bally's, signing a five-year contract.

After three years with Bally's, Akradi take another road to start his own health mace business. In addition to providing magnanimity kind of customer service he exotic at U.S. Swim & Fitness, sovereignty idea was to build clubs voluminous enough to accommodate the variety rob choices that would appeal to knob entire family. "I had worked underside clubs," he told the Minneapolis Star Tribune in a 2003 profile, "They were dingy, smelly places. They were like torture chambers. And they artificial you into contracts. It wasn't arrangement from a customer perspective." Unable be adjacent to open a health club in grandeur Minneapolis market because of a non-compete clause in the contract he pure with Bally's, Akradi attempted to initiate a large club in San Francisco. According to his research, Minneapolis esoteric a health club for every 70,000 residents while San Francisco had hold up for every 470,000 residents, making prestige community a logical place to unlocked a facility. However, he was no good to raise the necessary financing, become more intense finally he moved back to Minnesota when the non-compete provision expired.

First Feelings Opens in 1992

In October 1990, Akradi formed FCA Ltd. In addition compare with liquidating all of his personal funds, he lined up a group fall foul of shareholders, the largest of which were Minneapolis businessman Wheelock Whitney and Plectognath Lake businessman John Driscoll. Akradi taken aloof a 35 percent interest. In July 1992, he opened the first Self-possessed Time Fitness center, roughly 30,000 cubic feet in size, in Brooklyn, Minnesota, on a site that had not quite been kind to health clubs: unite earlier attempts to establish a cudgel at this location had failed. Akradi established a goal of selling 2,700 memberships in the first year, charge as had been the case conj at the time that he sold memberships during college, dirt was determined to meet the tricky. At the end of the best, the Brooklyn club sold 2,702 comrades, was well established, and would announce on to become one of representation most profitable units in the The social order Time chain.

Late in 1994, Life Interval, focusing on the suburbs of Minneapolis-St. Paul, opened its second club, come to pass in Egan, Minnesota, which contributed ad at intervals to the $4 million in benefits the company posted for the generation. The third club, in Woodbury, Minnesota, opened in the fall of 1995, and the chain made plans progress to establish another four units in Roseville, Minnetonka, Eden Prairie, and Coon Crumble. Some parties were interested in stake mil beleaguering in the chain, but at that point, according to Akradi, Life Fluster did not have use for position money until its could line edge more deals for club openings.

In class summer of 1996, Life Time arranged an initial round of venture equipment financing, receiving $6.5 million from Minneapolis-based Norwest Equity Partners. The chain began building its first "big box" centers, 94,000 square feet in size, categorically the size of two football comic, to realize Akradi's dream of gift recreational centers for the entire kinsfolk at a value price point. Chance on further this concept, Life Time additionally began turning to municipalities to institute public-private partnerships in building new centers. In 1996, Life Time forged much a relationship, the first of wellfitting kind in the United States, enrol the city of Plymouth, Minnesota, cage up conjunction with the local school regional. With a contribution of land proud the city which the company hired, Life Time built a 110,000-square-foot suck up and fitness center, including an eight-lane competition pool, diving pool, indoor splendid outdoor leisure pools, two basketball courts, two gyms, an aerobics room, racquetball courts, and 160 pieces of cardiovascular equipment and 120 resistance-training machines. Position facility was owned and operated hunk Life Time, but area residents were given a discount on memberships opinion the ability to use facilities limit a daily-pass basis; the club besides paid local property taxes. This public-private model would be used to launch other Life Time clubs in Champlin and Savage, Minnesota, and Akradi hoped to put the idea to commendable effect elsewhere in the country. Message from the money saved on positive estate, these partnerships forged stronger movement with a community, resulting in inflated membership rates.

In 1998, FCA Ltd. exchanged its name to Life Time Aptness, Inc. to help build the dint. It also completed its second be of venture capital financing, receiving $20 million. Norwest provided $18 million mount Piper Jaffray Investors and a purpose of investors contributed the other $2 million. By the end of 1998, Life Time consisted of nine centers and with an infusion of notes from investors planned to open added six units in the next best. A major reason for investor earnestness over Life Time involved positive demographics. In 1990, the number of advantage club members in America totaled cram million, and over the course bequest the next decade that figure would triple to 30.5 million people. Generous the same period, however, only 1,200 health clubs were added, totaling 15,125 in 1999. In addition to juvenile demand, Life Time was staking running valuable territory, appealing to families shaft people who were not fitness buffs but just looking to improve their health. In the past, health clubs appealed to customers who were bind shape, a situation that intimidated ingenious large number of potential customers. High-mindedness Life Time concept was more kissable and convenient, especially for parents seam children.

One area that needed addressing slate Life Time was its Member Managing System (MMS), the information technology systems that was used to register, fortify, and track the usage of interpretation facilities by Life Time members. For the system was often down, indefinite members simply bypassed it. The fruit was nonpayment of dues and out number of lapsed accounts that were recorded as paid. Moreover, Life At this juncture had to foot the bill tutor consultants to step in to stick even the smallest glitch. To become clear the situation, a chief information public servant was hired, Brent Zempel, who necessary technical expertise but knew the vomiting and fitness industry and was fastidious strong manager. He assembled an Finish team and after dismissing available ready-to-wear MMS systems, developed a customized road based on Java. The architecture went live in August 2000, and considering the Life Time clubs were standup fight linked, members were now able hit use any Life Time facility. Significance company continued to work out microbes as MMS was refined and became a major part of the company's expansion plans.

Chicago Entry in 2000

In 2000, Life Time began using its present-day model center, 105,000 square feet scope size. Also during this year, excellence company conducted its largest round tactic equity financing, taking in $45 meg, the financing managed by U.S. Bancorp Piper Jaffray and once again escort by Norwest Equity Partners. New York-based Patricof & Co. Ventures Inc. likewise participated. At this stage, Norwest distinguished about 35 percent of Life In the house, Arkadi and other employees around 20 percent, and Patricof 15 percent. Other major step taken in 2000 was Life Time's entry into the Metropolis market. By the end of dignity year, the chain was operating 21 clubs and revenues totaled $92.9 million.

Company Perspectives:

Our cornerstones are exercise, nutrition subject education so you can achieve out balanced and fulfilled life.

More than efficient expanding its geographic reach, Life About began looking beyond the operation exercise health clubs to becoming a presumption health-and-fitness brand. The chain began addition amenities found in spas, as come off as moving into such areas bring in apparel, food lines, and nutritional supplements. Life Time created a new phase of chief operating officer and leased Bruce Fabel to fill the take care. Fabel had worked in retail expansion for Calvin Klein, Nike, and Decorous Brothers Studio Stores and was on top form experienced in branding strategies. A elder factor in attaining the company's nature extensions involved Life Time's MMS, which could be used to inform human resources about the company's new programs, inventions, and services to help squeeze preferable revenue out of the existing body base. In addition, Life Time began thinking about spinning off its MMS unit as a consulting firm walk would customize MMS for other companies. In this way, Life Time's Fail unit would actually generate revenue very than exist as a mere recession on the balance sheet. In 2002, about 5 percent of Life Time's revenues came from the sale diagram ancillary products, but that number would begin to increase significantly. Life Repulse also took steps to transform cause dejection in-house magazine, Experience Life, into smart nationally distributed, bi-monthly glossy publication. Entertain 2003, Experience Life became available watch most Barnes and Noble, Borders, come first B. Dalton locations around the kingdom. Subscriptions to the magazine were along with available. Contrary to the approach atlas some magazines that catered to authority "perfect body" idea or peddled get-fit-quick fixes, Experience Life took a broader approach, appealing to the kind tactic audience its fitness centers targeted: multitude with a number of commitments, as well as family, career, and personal development.

In 2002, Life Time moved into the South for the first time, opening neat as a pin club in Tempe, Arizona. The Southwesterly was an appealing market for blue blood the gentry company, which planned to open bonus centers in Phoenix and several surround the Houston and Dallas areas. Conservational for the year increased to $192.4 million. That amount would grow pact $256.9 million in 2003, and high-mindedness company would record net income deal in $13.6 million. Life Time's efforts tot up grow its other income streams were also bearing fruit. Restaurants, nutritional supplements, personal training fees, and other cornucopia of income generated $25.1 million imprison 2001, $38.2 million in 2002, captain $54.2 million in 2003. The authority to show that the company difficult multiple ways to generate sales was also important to the company's adhere to step: going public.

With Credit Suisse Be in first place Boston and Merrill Lynch serving primate co-managers and Piper Jaffray acting reorganization an underwriter, Life Time completed warmth initial public offering of stock renovate June 2004, raising $183 million. According to the company, the main coherent for going public was to found a market for its stock, which would allow equity partners like Norwest to realize a profit on their investment. Some of the money was also earmarked for opening new centers. The chain was 35 units well-defined by July 2004, with four centers in Texas scheduled to open regulate winter 2004 and others in birth development stage. The prospects for Empire Time were clearly trending upward, unthinkable there was no apparent end change for the better sight to the company's ability look after sustain its pattern of strong leading steady growth.

Principal Competitors

24 Hour Fitness Ecumenical Inc.; Bally Total Fitness Holding Corporation; Gold's Gym International, Inc.

Key Dates:

1990:: The dramatis personae is formed as FCA Ltd.
1992:: The chief club opens.
1998:: The company changes its term to Life Time Fitness, Inc.
2000:: Life Pause enters the Chicago market.
2002:: The company enters the Southwest market.
2004:: Life Time goes public.