People who work out at health clubs and gyms should know of South Milwaukee-based Magnum Fitness Systems.
Magnum’s weight stacks, free weight equipment and cardio machines are used in fitness centers, school and collegiate training facilities, rehabilitation facilities, apartment buildings, condos and nonprofit facilities such as the YMCA and Jewish Community Centers.
The company’s biggest sellers are its weight stacks, which allow users to adjust the amount of weight they want to lift for a specific exercise. Magnum has four lines of weight stacks, including the E Series, Retro, Combination and Multi-station series.
The E Series has been the most popular seller, largely because of its biangular movement, which allows users’ hands to move in a more ergonomic pattern during use and makes for more natural and efficient exercise, according to Larry Nelson, vice president and co-owner of the company.
Magnum also manufactures several multi-station machines that are typically sold to small corporate centers, police and fire departments or multi-unit housing facilities.
Some of the multi-station machines also are handicapped-accessible, Nelson said.
“None of the major brands we compete with build one,” he said. “And we sell them almost exclusively to college rec centers. They’re the biggest fitness centers in the country.”
In the last three to four years, Magnum has increased sales of its Power Series, a racking and tower system for free weight lifting.
“There has been big growth in free weight equipment,” he said. “We make 60 to 70 pieces of free weight (equipment), from dumbbells to our Power Racks. They’ve driven the sales of our free weights.”
The company also manufactures a full line of cardio equipment, including treadmills, stationary bikes, elliptical trainers and steppers.
“We’ve seen some growth, but it’s not to the point that we want,” Nelson said. “We’re in some deep R&D to change our lineup of products. We truly see (cardio equipment) as part of the long-term growth of the company.”
Magnum was originally known as Badger Fitness Equipment. The company began in 1978 in founder Phil Polsey’s basement, where he manufactured weight benches, racks and plate loaded equipment. At the time, Nelson owned a gym on Milwaukee’s north side. Nelson bought several pieces from Badger and eventually began distributing the equipment through his gym.
In 1983, Polsey merged his business with Pat Ellis, who is now president and co-owner. Polsey is no longer involved in the business, and Nelson became part-owner and vice president in 1990.
By 2001, the company grew to about 130 employees. The firm also expanded into its current footprint of about 300,000 square feet of space.
Today, Magnum has 83 employees.
“We produce the same amount of equipment (as at our peak) because we’re so automated,” he said. “We’ve changed the way we manufacture completely. We do things in batches versus by order.”
Magnum also uses a just-in-time delivery system, Nelson said.
“We try to ship this week the stuff we built,” he said. “We’ve got a computer system that tracks orders, which also prioritizes work orders.”
Nelson said that offering cardio equipment, as well as Magnum’s line of rubberized flooring for fitness centers, was a move the company needed to make to stay in business.
“We want to be their sole source provider,” he said. “We knew we would have to do it to stay alive.”
The fitness equipment industry has changed dramatically since Badger changed its name to Magnum, Nelson said.
“Most of the other small (manufacturers) when we started are out of business or have been bought by large conglomerates,” he said.
Magnum’s main competitors now are Illinois-based Life Fitness, which is owned by Brunswick Corp., and Precor, owned by the Finnish company Amer Sports Corp.
“We’re a small manufacturer in big scale competition against these big players,” Nelson said.
Magnum is exploring options that could change the way it does business and make it more competitive for the future.
In about four weeks, Magnum will receive its first container of weight racks and benches manufactured in China, Nelson said. The company has found a partner in China it is considering partnering with, but is taking a slow approach.
“I don’t know where we’re headed, but we need to see if this makes sense,” Nelson said. “But the free weight equipment we build is as labor-intensive as the selector equipment (stations like the E Series) we build. And it sells for one-fifth to one-tenth the price of what a selector sells for.”
If the company can purchase free weight equipment that meets its standards from China for lower prices, its workers in South Milwaukee can focus on building products that sell for higher prices, Nelson said.
“If we can get the free weights there, we can be more efficient here,” he said.
Badger is also trying to reinvent itself, in terms of distribution, Nelson said. The company now sells through a direct sales force and a group of independent representatives.
“What we are looking at is being able to price ourselves more competitively by getting into dealer-based fitness sales,” Nelson said.
Magnum also is looking to enter the equipment refurbishing business. Often when a health club or gym orders new equipment, there is old equipment that needs to be hauled away. If Magnum were able to update electronics and re-upholster those pieces, it could essentially sell the same machines over and over, Nelson said.
The changes Magnum is making should help the company regain sales and increase revenues, perhaps even this year, Nelson said.
“2007, I think will be kind of flat,” he said. “We may see a slight increase. But I believe that 2008 can be great, with the things we’ve got going in China and the redesign (of several products). Some of the new weights (machines) are already going.”
Magnum Fitness Systems
Address: 2201 12th Ave., South Milwaukee
Founded: 1978
Products: Weight stack machines, free weight equipment, cardio machines and more.
New venture: Exploring exporting some products from China.
Employees: 83
Web site: www.magnumfitness.com
