Medifit closes doors, but will not file bankruptcy

by Karen E. Culp

SBJ Staff

Medifit Wellness & Fitness Center closed its doors Aug. 14, and is not likely to open them again, said Larry Wassam, club owner and president of Medifit Inc.

The club never recovered from flood damage it received in the spring and early summer of 1997, Wassam said.

"The insurance paid for us to restore the facility, but while we were doing that, we sustained a loss of income and were ultimately unable to recover from that lost income," Wassam said.

While the club recovered from the water damage, portions of the building were closed, some for as long as 2 1/2 months, Wassam said.

"It was a situation where not only were parts of the club simply closed off, but where parts of it were not welcoming to our guests," Wassam said.

Members of Medifit Wellness & Fitness Center can transfer their memberships to either Gold's Gym or Ozark Fitness Centers. The company, Medifit Inc., continues to exist and is still in business as a health insurance and wellness program provider for corporations, Wassam said.

Wassam also owns a subsidiary business, the Wellnet Group, which is a consulting company for health clubs around the country. The insurance and consulting businesses employ a total of three people, Wassam said.

Medifit Health and Fitness Center employed about 40 people, around 20 of whom were full time. Wassam said all but one of those employees had gotten jobs elsewhere.

"Many of our employees were able to get jobs with other clubs. I was able to give them some notice, so they were able to find something else," Wassam said.

The center is now selling off its assets; people have walked in or called to inquire about the club's used equipment for sale.

Medifit has three years remaining on its lease at 1271 E. Montclair, and is looking for a tenant to take over the remainder of that lease.

Rent for the building was about $16,000 per month, and competition among health clubs in Springfield had increased, Wassam said.

"It was probably in 1997 that we really started to see an increase in competition. The YMCAs nationally have shifted their focus and have placed a strong emphasis on the health club aspect of their facilities," Wassam said.

The health club at the Montclair site had operated under a number of different identities. The club started out in the mid-1980s as 24-Hour Nautilus, a national chain club that opened in Springfield.

The center was built for 24-Hour, Wassam said, and when the company went bankrupt, the name of the club became Espree and remained that until 1995.

Wassam, who became the owner of the club when it became Espree, merged the club with Medifit Inc., the company he ran that was in the health insurance and corporate wellness program business, and renamed the club the Medifit Wellness & Fitness Center.

Owning this fitness center has been Wassam's first and only experience with ownership of such a venture. He said he is not likely to start another club in Springfield, but will focus on the other businesses under the Medifit umbrella.

Before closing the club, Wassam tried to sell it as a running operation. He had interest from some area businesspeople, including Cox Health Systems, he said. Officials with Cox said the company did not at any time enter into an agreement with Wassam to purchase the center, and declined to say whether the hospital system had discussed a purchase, since it is the hospital's policy not to discuss negotiations.

Medifit always kept its rates low, and Kent Morrison, owner of Gold's Gym, cited those low membership rates as

one of the reasons the club ultimately closed.

"They were just too cheap. Their memberships were so low that they would have to sell two or three memberships to generate the revenue that one membership would at another club," Morrison said.

Gold's is one of the clubs that is accepting transfer members from Medifit, and it is honoring the contracted rate of monthly payments for each member, but charging a $49 transfer fee for the member to serve out his or her contract at Gold's.

"The $49 transfer fee was the right thing for us to do. We would have lost money otherwise," Morrison said.

Medifit will not file for any sort of bankruptcy; Wassam said he is negotiating with the club's creditors to get debts paid off.

"I don't feel right about filing for bankruptcy. I plan to live in this community and make it my home, and for that reason, bankruptcy doesn't seem like the right thing to do," Wassam said.

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