Two of the major suppliers of home fitness equipment on the Italian market, Icon Health & Fitness and Fassi Sport, are reducing their operating expenses because of reduced volumes and margins.

Icon is about to announce its decision to shut down its Italian office in Perugia, which employs about 10 people, and to centralize all European operations in France. Icon had previously closed its German subsidiary, Aicon. The office in Perugia had served as its operational base for all of Europe until the beginning of 2006, when the French-based Renaud Grout was appointed as Icon’s general manager for Europe, replacing Giovanni Lato, who had held that position for 13 years.

Major clients have already been informed about this move, which started with the gradual transfer of customer service operations for the Italian and French markets to a call center in Romania. The transition has not been quite smooth, however.

Fassi Sport has already reduced its total staff from 40 to 20 employees at its head office at Serravalle, in the Republic of San Marino. Its reorganization was prompted by a sharply reduced turnover and by a change of ownership that took place in May 2008. A private British holding company, Coam, acquired a controlling stake in a new company in San Marino, Fassi Sport SpA, that took over Fassi’s business from Cammax, a holding company in San Marino that is going into receivership.

The bankruptcy of Cammax is related to a highly publicized financial scandal where the Italian government requested its payment of back taxes for two other subsidiaries that have been operating on Italian territory.

The new Fassi Sport has also taken over Cammax' TÜV-certified factory in Taiwan that was making its professional fitness equipment. In November 2007, even before its formal acquisition of Fassi, Coam appointed a new chief executive at the head of the company, Massimiliano Colombo. He continues as one of the three top managers of MIC, the company that has the distribution of Shimano in Italy.

Officials of the new Fassi Sport said there was no relation between its own financial problems and those of a major client in Serravalle, Puntoshop, that has been taken over by a consortium of banks because of a big decline in its own revenues. Fitness equipment is one of the major categories for this online retailer.

Including Turner and other sister brands that target lower market segments, Fassi itself had total sales of about €15 million in 2007 and 2008, but they are expected to decline to only around €10 million this year because of lower demand and increased price competition. This should happen in spite of an increase in sales of professional fitness equipment to more than €3 million from only €1 million in 2008. The new management has decided to clean up the distribution and to work only with credit-worthy clients.

Icon, which is still the national market leader for home fitness, saw its sales in Italy decline to €18 million in the year ended last May 30 from €20 million the year before.

A detailed report of more than 20 pages on the Italian fitness market is part of the report on the Italian sporting goods market that will come out later this month.