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features

Life lessons: Steve Schwartz

When a hefty round of investment coincided with the pandemic, the CEO of Midtown Athletic Clubs feared the company – founded by his grandfather – would go down on his watch. He talks to Kath Hudson about the pressure to keep the business afloat

Published in Health Club Management 2024 issue 4
Midtown clubs are sited in eight US locations, including Rochester NY and Atlanta GA / photo: Midtown Athletics Club / WALTER COLLEY
Midtown clubs are sited in eight US locations, including Rochester NY and Atlanta GA / photo: Midtown Athletics Club / WALTER COLLEY
I was disappointed in myself when I realised how much of my sense of worth was tied up in the success of the business

Bar none, the toughest time I’ve ever had was going through COVID.

In 2017 we undertook a US$90m development of our flagship club in Chicago. The biggest risk we’d ever taken, it represented the start of a new vision for our company – a multi-year project, combining all of the experience and skills and knowledge I’d developed over my 35-year working life.

We were in the thick of it when we had to close. I’m the third generation running a family business and before the pandemic, I felt at the apex of my career, but then was suddenly presented with the prospect of the business failing on my watch.

It was personally devastating, because it crushed my dreams, emotionally devastating because I had to lay people off – which went against everything I was trying to do. Then there was the element of failure and this being a family business. We were also too large to get any government support, so having been such a believer in the system, I felt very let down.

Unique situation
This was a unique set of circumstances and a unique situation. Previously, although we’d had various challenges and tough setbacks, I had always felt I could work through them and find solutions. But this was a case where we were told to close whether we liked it or not. I’m used to winning and have never felt so helpless.

I made the very risky decision to keep investing in the new vision – I thought if I’m going down, I’m going to burn all the way! I hoped the investment in creating state-of-the-art clubs would give us the opportunity to come back stronger once we were able to reopen and it’s easier to do renovations when there are no members around.

We had to engage with bankers while having no revenue, but fortunately they agreed to lend us money for capital investment.

It was a Thelma and Louise-style, ‘drive off the cliff moment’ and the stress was incredible. Sleepless nights, putting on weight. I was on Zoom all day long. My wife and I were eating and drinking too much and not exercising enough. It was terrible.

Keep enough chips
I don’t remember the date we became cashflow positive again, but I personally didn’t turn the corner until the beginning of 2023. It wasn’t just about having my company back, it was about thriving again. Not all the clubs are back to where they were – some are way ahead and some are still behind – but 2023 was a record year for us in terms of revenues and profits.

What did I learn from all this? That you can never have too much cash! As a privately-owned, family business, having a sound balance sheet had always been one of our core principles and that paid off in spades. When we were confronted with this existential threat, we were able to zero in on some of the things we needed to do because we didn’t have the choice to do otherwise. Nothing focuses the mind more effectively than the hangman’s noose!

Finishing the final two club renovations became an all consuming priority, as did taking the company’s IT platform from the stone age to the digital age.

Sense of worth
But I was disappointed in myself when I realised how much of my sense of worth was tied up in the success of the business. I have a wonderful family: a great wife, great kids, sisters, nieces, nephews, parents. I’m blessed in that sense and this experience made me realise I hadn’t appreciated it as much as I should have done.

My father, who died recently, was there supporting me every step of the way through the crisis. There were days when some people thought it would be better to just sell the business than reinvest, but there was no way that was happening with my dad and me. When we ran out of cash, both he and I put more money into the company. He’s a very tough act to live up to, but nothing years of therapy can’t cure!

There was a book which really helped me called The Biggest Bluff: How I learned to pay attention, take control and master the odds, by Maria Konnikova, about a psychology professor who became a professional poker player. She said to win you have to use your skill, keep your emotional control when you get a bad break and make sure you have enough chips in your stack to play the next round. I found it incredibly helpful to think in those terms.

I also kept the Nietzsche quote in mind: ‘What does not kill me makes me stronger’, although my conclusion is that if I could have avoided the experience, I’d be a little bit weaker and still be okay!

What does not kill me makes me stronger (German: Was mich nicht umbringt, macht mich stärker) is part of aphorism number 8 from the ‘Maxims and Arrows’ section of Friedrich Nietzsche’s Twilight of the Idols (1888).

photo: Midtown Athletics Club

"I thought, if I’m going down, I’m going to burn all the way" – Steve Schwartz

2023 turned out to be a record year for revenue and profits / photo: Midtown Athletics Club / anthony tahlier
2023 turned out to be a record year for revenue and profits / photo: Midtown Athletics Club / anthony tahlier
Midtown Athletics is a third generation-run family business / photo: Midtown Athletics Club / MyZone
Midtown Athletics is a third generation-run family business / photo: Midtown Athletics Club / MyZone
The Spa at Midtown in the Rochester club
The Spa at Midtown in the Rochester club
Athletic and functional fitness is a core offer at Midtown / photo: Midtown Athletics Club / WALTER COLLEY
Athletic and functional fitness is a core offer at Midtown / photo: Midtown Athletics Club / WALTER COLLEY
All the clubs have a luxury fitout and feature high end fitness and lifestyle offerings / photo: Midtown Athletics Club / WALTER COLLEY
All the clubs have a luxury fitout and feature high end fitness and lifestyle offerings / photo: Midtown Athletics Club / WALTER COLLEY
The flagship Midtown Club in Chicago underwent a US$90m development in 2017 / photo: Midtown Athletics Club / anthony tahlier
The flagship Midtown Club in Chicago underwent a US$90m development in 2017 / photo: Midtown Athletics Club / anthony tahlier
https://www.leisureopportunities.co.uk/images/2024/889295_296050.jpg
The CEO of Midtown Athletics Club talks about how the timings of a major funding round and COVID threatened the existence of his family-founded company
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As more trans women, trans men and non-binary people join health clubs, it’s time to work out a system where everyone feels included, protected and safe in the locker room. Kath Hudson reports
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features

Life lessons: Steve Schwartz

When a hefty round of investment coincided with the pandemic, the CEO of Midtown Athletic Clubs feared the company – founded by his grandfather – would go down on his watch. He talks to Kath Hudson about the pressure to keep the business afloat

Published in Health Club Management 2024 issue 4
Midtown clubs are sited in eight US locations, including Rochester NY and Atlanta GA / photo: Midtown Athletics Club / WALTER COLLEY
Midtown clubs are sited in eight US locations, including Rochester NY and Atlanta GA / photo: Midtown Athletics Club / WALTER COLLEY
I was disappointed in myself when I realised how much of my sense of worth was tied up in the success of the business

Bar none, the toughest time I’ve ever had was going through COVID.

In 2017 we undertook a US$90m development of our flagship club in Chicago. The biggest risk we’d ever taken, it represented the start of a new vision for our company – a multi-year project, combining all of the experience and skills and knowledge I’d developed over my 35-year working life.

We were in the thick of it when we had to close. I’m the third generation running a family business and before the pandemic, I felt at the apex of my career, but then was suddenly presented with the prospect of the business failing on my watch.

It was personally devastating, because it crushed my dreams, emotionally devastating because I had to lay people off – which went against everything I was trying to do. Then there was the element of failure and this being a family business. We were also too large to get any government support, so having been such a believer in the system, I felt very let down.

Unique situation
This was a unique set of circumstances and a unique situation. Previously, although we’d had various challenges and tough setbacks, I had always felt I could work through them and find solutions. But this was a case where we were told to close whether we liked it or not. I’m used to winning and have never felt so helpless.

I made the very risky decision to keep investing in the new vision – I thought if I’m going down, I’m going to burn all the way! I hoped the investment in creating state-of-the-art clubs would give us the opportunity to come back stronger once we were able to reopen and it’s easier to do renovations when there are no members around.

We had to engage with bankers while having no revenue, but fortunately they agreed to lend us money for capital investment.

It was a Thelma and Louise-style, ‘drive off the cliff moment’ and the stress was incredible. Sleepless nights, putting on weight. I was on Zoom all day long. My wife and I were eating and drinking too much and not exercising enough. It was terrible.

Keep enough chips
I don’t remember the date we became cashflow positive again, but I personally didn’t turn the corner until the beginning of 2023. It wasn’t just about having my company back, it was about thriving again. Not all the clubs are back to where they were – some are way ahead and some are still behind – but 2023 was a record year for us in terms of revenues and profits.

What did I learn from all this? That you can never have too much cash! As a privately-owned, family business, having a sound balance sheet had always been one of our core principles and that paid off in spades. When we were confronted with this existential threat, we were able to zero in on some of the things we needed to do because we didn’t have the choice to do otherwise. Nothing focuses the mind more effectively than the hangman’s noose!

Finishing the final two club renovations became an all consuming priority, as did taking the company’s IT platform from the stone age to the digital age.

Sense of worth
But I was disappointed in myself when I realised how much of my sense of worth was tied up in the success of the business. I have a wonderful family: a great wife, great kids, sisters, nieces, nephews, parents. I’m blessed in that sense and this experience made me realise I hadn’t appreciated it as much as I should have done.

My father, who died recently, was there supporting me every step of the way through the crisis. There were days when some people thought it would be better to just sell the business than reinvest, but there was no way that was happening with my dad and me. When we ran out of cash, both he and I put more money into the company. He’s a very tough act to live up to, but nothing years of therapy can’t cure!

There was a book which really helped me called The Biggest Bluff: How I learned to pay attention, take control and master the odds, by Maria Konnikova, about a psychology professor who became a professional poker player. She said to win you have to use your skill, keep your emotional control when you get a bad break and make sure you have enough chips in your stack to play the next round. I found it incredibly helpful to think in those terms.

I also kept the Nietzsche quote in mind: ‘What does not kill me makes me stronger’, although my conclusion is that if I could have avoided the experience, I’d be a little bit weaker and still be okay!

What does not kill me makes me stronger (German: Was mich nicht umbringt, macht mich stärker) is part of aphorism number 8 from the ‘Maxims and Arrows’ section of Friedrich Nietzsche’s Twilight of the Idols (1888).

photo: Midtown Athletics Club

"I thought, if I’m going down, I’m going to burn all the way" – Steve Schwartz

2023 turned out to be a record year for revenue and profits / photo: Midtown Athletics Club / anthony tahlier
2023 turned out to be a record year for revenue and profits / photo: Midtown Athletics Club / anthony tahlier
Midtown Athletics is a third generation-run family business / photo: Midtown Athletics Club / MyZone
Midtown Athletics is a third generation-run family business / photo: Midtown Athletics Club / MyZone
The Spa at Midtown in the Rochester club
The Spa at Midtown in the Rochester club
Athletic and functional fitness is a core offer at Midtown / photo: Midtown Athletics Club / WALTER COLLEY
Athletic and functional fitness is a core offer at Midtown / photo: Midtown Athletics Club / WALTER COLLEY
All the clubs have a luxury fitout and feature high end fitness and lifestyle offerings / photo: Midtown Athletics Club / WALTER COLLEY
All the clubs have a luxury fitout and feature high end fitness and lifestyle offerings / photo: Midtown Athletics Club / WALTER COLLEY
The flagship Midtown Club in Chicago underwent a US$90m development in 2017 / photo: Midtown Athletics Club / anthony tahlier
The flagship Midtown Club in Chicago underwent a US$90m development in 2017 / photo: Midtown Athletics Club / anthony tahlier
https://www.leisureopportunities.co.uk/images/2024/889295_296050.jpg
The CEO of Midtown Athletics Club talks about how the timings of a major funding round and COVID threatened the existence of his family-founded company
Latest News
Belgian retail giant, Colruyt Group, is challenging the status quo of the fitness industry in ...
Latest News
According to a year-long study, offering financial incentives to people to encourage them to lose ...
Latest News
Xponential Fitness has appointed sales and franchise expert, Mark King, as CEO, to take the ...
Latest News
Fitness influencer and karate champion, Anna Lewandowska, has announced the launch of a multi-concept boutique ...
Latest News
The Health & Fitness Association (formerly IHRSA) has announced Singapore-based attorney and international industry advocate, ...
Latest News
With the UK General Election imminent, industry strategist, Martyn Allison, says it’s time for the ...
Latest News
More than 20 organisations have joined together in the UK to form the Swim Alliance, ...
Latest News
According to a number of recent studies, semaglutide weight-loss drugs can be effective in treating ...
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German health and fitness operator, LifeFit Group, has found a new investor – Waterland Private ...
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Diversity, equity and inclusion in the European fitness industry is examined in a new report ...
Featured supplier news
Featured supplier news: Explosion of passion for fitness at RiminiWellness 2024 and record success for Panatta
The passion for fitness and bodybuilding reached new heights at the Panatta stands during RiminiWellness (30 May – 2 June 20204) – the largest fitness event in Italy – which this year exceeded the 100,000 visitor mark.
Featured supplier news
Featured supplier news: CoverMe Fitness launches in Australian market
CoverMe Fitness, the studio management app for the fitness industry, has launched in Australia, with industry veteran Tony Zonato as managing director for the region.
Company profiles
Company profile: Taylor Made Designs
Taylor Made Designs (TMD) is a ‘leisure specialist’ provider of bespoke leisure workwear, plus branded ...
Company profiles
Company profile: TRP (powered by Fitronics)
Fitronics develop effective, user-friendly software for the sport, health and fitness industry to improve member ...
Supplier Showcases
Supplier showcase - Matrix: Futureproofing
Supplier Showcases
Supplier showcase - Jon Williams
Catalogue Gallery
Click on a catalogue to view it online
Featured press releases
Zoom Media press release: Zoom Media UK partners with Your Personal Training to expand rewards platform to PT clients
Zoom Media UK, the leading provider of digital media solutions for fitness facilities, is announcing an exciting new partnership with Your Personal Training (YPT), the UK’s foremost Personal Training brand. This collaboration marks the first time Zoom’s rewards platform will be directly available to the clients of YPT trainers, offering unique incentives to enhance client engagement and retention.
Featured press releases
ABC Trainerize press release: How RockBox Fitness is energizing members with fitness challenges powered by ABC Trainerize
RockBox Fitness, a leading franchise known for its dynamic boxing-based fitness classes, has revolutionized member engagement with a new partnership with ABC Fitness and the implementation of ABC Trainerize throughout its franchise network.
Directory
Cryotherapy
Art of Cryo: Cryotherapy
Spa software
SpaBooker: Spa software
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Lockers
Fitlockers: Lockers
Snowroom
TechnoAlpin SpA: Snowroom
salt therapy products
Saltability: salt therapy products
Property & Tenders
Cleveland Lakes, Wiltshire and Gloucestershire
Cotswold Lakes Trust
Property & Tenders
Loughton, IG10
Knight Frank
Property & Tenders
Diary dates
03-05 Sep 2024
IMPACT Exhibition Center, Bangkok, Thailand
Diary dates
08-10 Sep 2024
Wyndham® Lake Buena Vista Disney Springs™ Resort, Lake Buena Vista, United States
Diary dates
19-19 Sep 2024
The Salil Hotel Riverside - Bangkok, Bangkok 10120, Thailand
Diary dates
20-22 Sep 2024
Locations worldwide,
Diary dates
01-04 Oct 2024
REVĪVŌ Wellness Resort Nusa Dua Bali, Kabupaten Badung, Indonesia
Diary dates
09-13 Oct 2024
Soneva Fushi, Maldives
Diary dates
10 Oct 2024
QEII Conference Centre, London,
Diary dates
22-25 Oct 2024
Messe Stuttgart, Germany
Diary dates
24-24 Oct 2024
QEII Conference Centre, London, United Kingdom
Diary dates
04-07 Nov 2024
In person, St Andrews, United Kingdom
Diary dates
04-06 Feb 2025
Coventry Building Society Arena, Coventry, United Kingdom
Diary dates
11-13 Feb 2025
Fairmont Riyadh , Saudi Arabia
Diary dates
10-13 Apr 2025
Exhibition Centre , Cologne, Germany
Diary dates
07-07 Jun 2025
Worldwide, Various,
Diary dates
28-31 Oct 2025
Koelnmesse, Cologne, Germany
Diary dates
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