Anne Beasley paid $300 for a two-year membership at the Lookin' Good Health Spa in Fairfax County and then she took a week's vacation. When she returned, the spa was gone. Closed. The firm filed for bankruptcy.
"The place was just mobbed," said Peggy Alexander who, with her husband, spent $700 for three-year renewable memberships to the White Oak Nautilus in Montgomery County. The Alexanders were surprised June 1, a year after they joined, when the spa closed.
"I thought I was getting a deal--a membership I didn't have to renew," said Barbara Borne, another customer of the closed Lookin' Good chain. "But you can't renew something that's not there."
They are among the thousands of Washington area consumers who officials say have lost more than $1 million in the collapse of dozens of health and fitness centers. Complaints about the closings have become the largest single source of calls to most consumer protection agencies in the region.
"I have a mile-high file," grouses Doretha Gale of the D.C. Complaint Center. In Fairfax County, complaints about the spas are up 600 percent this year, one of the sharpest increases reported in the Washington area. Officials in Fairfax and other counties say unhappy spa customers now outnumber persons with complaints about billing problems, a subject that used to be their No. 1 consumer complaint.
Consumer protection officials say there is little they can do to help the spa customers, except to direct them to the local bankruptcy court. There the former customers can ask for the return of the membership fees, a prospect that the officials say offers no certainity of success.
Washington, Dallas and San Francisco, reflecting what some say was an overbuilding that followed a national craving for physical fitness, are among the areas hardest hit in a recent rash of spa closings. Since December, 10 Barbara Ellen salons, three Fitness Management centers, four Lookin' Good spas, several of the local Gloria Marshall spas and the Slender Lady spa in Alexandria have closed.
John Dietrich, coauthor of a national guide to health fitness centers, said the recent closings are the fallout from the 70s when "everyone was jumping on the fitness bandwagon."
"What we are seeing are the results of overbuilding," he said in an interview. "There would be three or four clubs started in an area where the population couldn't support that many. Then the recession came along."
Dietrich said he believes the nation's obsession with fitness has leveled off. The clubs that survive, he said, will be ones that diversify into other sports or add bars and restaurants, transforming themselves into social centers.
Washington area officials are uncertain how many complaints have been filed in the area because each jurisdiction keeps its own, and sometimes incomplete, records. And because most spa chains are privately owned and many centers are individual small businesses, financial analysts say they are unable to precisely monitor the industry.
The case of Barbara Borne, officials say, is typical of many in the area. Borne says she was lured by the offer of a two-year membership for $300 at Lookin' Good in Fair Oaks Mall, so much that she talked a friend into joining. Two weeks and six visits later she went to the mall near Fairfax City and found a lock on the door and a sign that read: "Closed until further notice."
Borne has filed a creditor's claim in the bankruptcy proceeding involving W&B Enterprises Inc., which operated the four Lookin' Good spas in the Washington area, a step not all customers take.
"I get many more calls than complaints. People call but they often don't want me to send out the form. They don't want to bother," said Gale in the District complaint office.
According to Richard Golden, an assistant Fairfax county attorney representing consumers in the Lookin' Good bankruptcy case, federal law gives most consumer claims priority for payment over tax claims but not over unpaid wages, administrative costs and employe benefits. But most spas, he said, have few assets to be sold for payment of debts.
Court officials said they have been able to locate only one W&B executive and he was unfamiliar with many of the firm's financial practices. The owner and president of the four area spas, Wayne Pierce, cannot be located, said Gerald O'Donnell, the court-appointed trustee overseeing a bankruptcy court hearing.
The District, Maryland and Virginia all require the spas to post bonds if they begin selling memberships before their facilities open. Maryland recently went further, enacting a law requiring all clubs offering memberships for three months or longer to post $50,000 in cash, a bond or letter of credit.
Consumer agencies stress awareness above all. "If you see an offer which is too good to be true, it may be just that," said Tony Provine, supervisor of investigations for Fairfax County's consumer protection agency.
Consumers should be especially wary of extraordinarily low prices, officials warn. "A spa could be in the last throes of its death dance," said Provine. The White Oak Nautilus, Barbara Ellen and Lookin' Good all offered rock-bottom prices before closing, officials said.
They suggest joining pay-as-you-go programs and only doing business, in Maryland, at bonded businesses. Author Dietrich advises consumers to deal only with centers that belong to the American Physical Fitness Centers Association. Under its code of ethics, he said, members honor contracts made by fellow members that go bankrupt.
Successful spas are battling increased consumer skepticism. "It affects in that it doesn't look good for anybody when one spa fails," said Kathy Delcoco, a manager of the Falls Church Holiday Spa.
Some spas have agreed to honor the memberships of their failed competitors and others are offering bonuses to attract the customers of their failed competitors. For example, Holiday Spas, which has 10 centers in the Washinton area and more than 1,500 affiliates nationwide, offers members of defunct spas two additional years when they join the Holiday chain.