Hometown Proud: St. Louis’ Club Fitness
St. Louis is a proud city, known for its hard-working people, raving sports fans and many tourist attractions, including the famous Gateway Arch. And if you’re a business that was founded in St. Louis, it’s likely you’ll reap the benefits of greater loyalty and respect from the city’s residents.
“There’s a huge loyalty and affinity for St. Louis,” said Michelle Micheletti, the director of marketing for Club Fitness. “Anything that is from here — born here — there’s a different loyalty that comes with that.”
Club Fitness, founded in St. Louis in 1983, can stake this claim. Over the last 30+ years, the fitness chain has been locally owned and operated, boasting the largest footprint in the region with 22 locations.
“We truly care about the community,” said Micheletti. “No other competitor in this market can say they’re from this market, that they were born in this market — that really sets us apart.”
The brand is also the only employee-owned fitness chain in St. Louis, making it unique in that its staff have a true stake in the company’s success.
Club Fitness became employee owned in 2015. At the time, founder John Crocker was seeking to retire, and had received interest from several private equity firms to buy the company outright. However, after researching all of his options, he ultimately decided to make the business employee-owned through an employee stock ownership program (ESOP).
With a background in commercial and retail banking, Eric Schreimann was hired to start the ESOP process as the chief financial officer.
“We looked at all options, and John had come to the conclusion that an employee stock option would be the right fit for him, the employees and the organization,” recalled Schreimann. “I came onboard to help get the company prepared for that transaction and get that across the finish line.”
According to Schreimann, who now serves as the brand’s CEO, one of the biggest challenges of the transition to an ESOP company was educating employees on the benefits, as it can take two to three years for the process to reach fruition.
“We were told this was going to happen, but it really takes two or three years for employee-owners to understand the impact and opportunity they have,” explained Schreimann. “When you have that first year, that first share allocation comes out, and the value of the company is lower because there’s ESOP debt, so it’s really not a lot. Then that second year comes out and you get that second round of stock certificates and now there’s more value and more money. Then your third year, you see more accumulation of company share and wealth.”
Today, the value of being an ESOP company is being realized. “We’re getting to the point now where people are beginning to realize this is really something special we have,” said Schreimann.
In fact, the employee-ownership aspect is a key advantage in the brand’s effort to recruit and retain top talent.
“This gives us another arrow in our quiver when we recruit and identify talent,” said Schreimann. “This is an opportunity to say, ‘Hey, this is not just a job for you. This is an opportunity for you to come into something special and literally have the opportunity to be an owner of Club Fitness.’ Not very many people have the opportunity to be an owner of a company, so it really helps us differentiate.”
According to Matt Bohn, the regional director of Club Fitness, becoming an ESOP company has also had a direct impact on employee morale, resulting in more buy-in and empowerment.
“The hard work and dedication that comes from employees knowing they’re part of something bigger — that’s special,” said Bohn. “For me, it’s looking around and seeing not everyone is doing just a task. It’s not a job, but they’re part of a group, they’re part of the Club Fitness family. I see that energy, that excitement, in the clubs all the time.”
This trickles down to the member experience. As Bohn explained, when your employees feel taken care of, they ultimately take better care of your members. “If we can excite the employees, we can’t lose,” he said.
Ultimately, being an ESOP company ties into Club Fitness’ aim to “Lift Local,” or give back to the city it has called home for more than 30 years.
The first aspect of “Lift Local” involves lifting up employees by providing a safe place for associates to grow professionally and personally as an ESOP company.
The second aspect involves lifting up members by providing clean, functional and friendly gyms that meet the needs of everyone, no matter their shape, size, goals, age, experience level or budget.
For example, Micheletti explained Club Fitness strives to be accessible and inclusive by offering a wide range of amenities and affordable membership options so the needs of each member of the community are met. “It doesn’t matter if you are older or younger, whatever your fitness level is — we have something in our gyms that can help you be successful,” she said.
Lastly, the third aspect involves lifting up the St. Louis community as a whole by being an active contributor and partner to important causes.
“We want to give back to our community,” said Micheletti. “We want to support our community that supports us. We don’t only support it from a financial standpoint or a sponsorship standpoint — we actually go out and volunteer within the community to really help lift our community up to be a healthier, happier place.”
This commitment to “Lift Local” has resulted in increasing success for Club Fitness, with the brand reporting $40 million in revenue in 2018.
In 2019, Club Fitness added four additional locations, strengthening its foothold in the St. Louis market. It has also doubled the size of several existing facilities, and is doing enhancements throughout the chain.
With 1,100 employees, and plans to hire dozens more in 2020, the outlook for Club Fitness is bright. And as an ESOP company, its staff will remain central to its continued success.
“I think what differentiates one company from the next are the people,” said Schreimann. “We all have cardio and circuit equipment, but it’s the people inside who really make the difference. We identified that several years ago when we became an employee-owned company, and it really has separated us from the pack and provided a great opportunity for our team.”
Looking ahead, Club Fitness will continue to strengthen its position in the St. Louis market, remaining hometown proud along the way.
“The short-term plan is the continued strategy on remodeling and building out our home here in St. Louis, with the opportunity for expansion in the near-term future,” said Schreimann.