Johnson Health Tech, the Taiwanese fitness company, has set itself a target of tripling the sales of its commercial fitness equipment range over the five-year period until 2015, as gyms are diversifying and the company is widening its product range, with some interesting novelties in the pipeline.
The target is based on sales in 2010, when Johnson reached a turnover of about 11.7 billion Taiwan dollars (€293.7m-$383.2m). Commercial equipment then made up about 55 percent of the group's sales, equivalent to more than NT$6.4 billion (€160.7m-$209.6m), chiefly with the Matrix and Vision Fitness brands. The target therefore calls for this category to expand to more than NT$19 billion (€477.0m-$622.3m) by 2015.
Chiefly consisting of the Horizon brand, the Johnson group's sales of home fitness amounted to about 45 percent of its turnover last year. This spread between home and gym equipment excludes OEM manufacturing; Johnson moved into the fitness market in 1980 with OEM production, but this now makes up less than 10 percent of its business.
The new target fits in with a continued shift in Johnson's offering. Only two years ago, the spread of the group's sales was still led by home equipment at about 55 percent, compared with 45 percent for gym equipment.
Johnson's increased emphasis on gym equipment, which yields a much higher gross margin, has contributed to brisk growth for the group since 2006, with a compound annual sales expansion of 28 percent.
Among other openings for diversification on the commercial side, Johnson points to the emergence of low-cost gyms, in which members pay as they go or pay only for very basic services. Spreading across the United States as well as emerging economies, such gyms have very tight budgets for their equipment. They require products that are fit for very intensive use, and that provide rapid and efficient maintenance.
About 51 percent of Johnson's turnover still comes from the Americas region, but it has been building up its business in other markets as well, particularly in Asia. Johnson has 143 stores in China, out of 257 around the world.
Another strong growth market is Brazil, where Johnson has had a subsidiary for the last five years, with an export manager supervising sales to other countries in Latin America. Johnson had a network of exclusive dealers in Brazil for its home fitness line, but two-thirds of its sales there are in the commercial segment, where the company claims the second position in the market after Life Fitness.
The company operates three plants, with a surface of more than 3 million square feet. Its two plants in mainland China produce all of the company's home fitness equipment, as well as its commercial strength machines, while the cardio equipment intended for gyms is made at its huge compound in Taichung. The company also boasts a components factory in Shanghai, so that its production is entirely integrated.
