The executive president of Renaissance,Inc.,provides a guided tour of tha fitness industry in the Land of Rising Sun.
By Patricia Amend
CBI:To begin the conversation, could you provide a brief overview of DIC Renaissance, Inc., the major health club chain that you head?
MASAAKI YOSHIDA: Our company, Renaissance, Inc., was established in 1979, and has its head office in Ryogoku, Sumida-ku, Tokyo, Japan.
At the end of March 2016, we had 1,058 employees and paid-in capital of $19.6 million. We own and operate 106 facilities: 88 sports clubs, four swimming clubs, one tennis school, nine yoga and Pilates studios, two fitness studios, and one facility that's dedicated to personal training.
We also operate, on a service-contract basis, 29 sports clubs and 15 rehabilitation centers.
At the end of February, we were managing a total of 150 facilities.
CBI: As a public company, Renaissance regularly reports on its financial performance. What have its metrics looked like recently?
MY: For the third quarter of our fiscal year, which ended on December 31, we reported sales of $294.4 million, a net profit of $16 million, and a growth rate o 49.1% for the quarter.
CBI : The IHRSA Global Report for 2016 describes Japan as having 9,979 clubs, 4.1 million members, and generating $5.2 billion in annual revenues.
Do those numbers sound right to you? Assessing as best you can, what do you think the corresponding numbers might be in 2020?
MY: Yes, those numbers sound correct. However, they reflect only the operation of the country's private health and fitness clubs.
lf we were to add in the figures for public, municipal, and other nonprofit providers, the numbersーfor facilities, members, and revenuesーwould be even higher.
Having said that, though, the participation rate is lower in Japan than it is in Western countries.
CBI: What pleases you most about the company's recent performance?
MY: Our mid-term corporate strategy is to transform Renaissance from a company specializing in the management of sports clubs o a management firm serving a variety of businesses that employ "health" as a keyword.
As a result, we're currently engaged in three core projects: increasing the profitability of our sports club business, creating new growth drivers, and developing an organization and personnel base that can support sustainable growth. These initiatives are producing results.
For instance, with respect to new growth drivers, we're collaborating and beginning to do business with local and national government agencies and with companies in other sectors.
We're also actively promoting health services using information and communications technology (ICT).
Two of the programs we've introduced are Karada Kawaru Navi, which translates as "navigation to change your body," and Karada no Kimochi Yoga, or "yoga for your body feeling", which takes into account the changes that take place in a woman's body during the menstrual cycle.
CBI: We understand that you also took some satisfaction in the 2016 Olympic Games in Rio de Janeiro.
MY: We were delighted that two swimmers from our company participated in the Rio Games.
Thanks to that, the number of students in our swimming school has grown steadily and now exceeds 100,000 members.
Now we're fully committed to developing the next generation of competitive swimmers for the 2020 Summer Games in Tokyo.
CBI: We understand that swimming is incredibly popular in Japan. Could you explain why that's so?
MY: In 1964, during the 18th Summer Olympics, the Japanese swimming team suffered a crushing defeat.
After that, swimming schools were launched to restore the country's standing in the sport, and, during the 1970s, the number of schools increased rapidly.
Swimming also is a very effective form of full-body exercise, and one that people can profit from all their lives.
In our curriculum, children master four swimming styles, step by step, and also learn about manners and proper group behavior.
Scientific theory and advanced training methods are employed in our high-performance courses.
And people can still participate when they get older, in masters swimming, for instance.Swimming is one of the few sports that people can enjoy lifelong.
That's why the Japanese public supports it so strongly.
CBI: What do you regard as Renaissance's greatest challenges going forward?
MY: One of the most pressing issues in Japan has to do with the country!s aging population.
So,in addition to managing fitness facilities, we!re trying to align ourselves with the healthcare industry.
One of our brands,the Genki Gym rehabilitation centers, offers human-fanction courses, as well as Synapsology, a program that!s designed to revitalize aging brains.
The Gym provides training for elders who require long-term care so that they can eventually reduce or eliminate their need for care.
We've already seen cases where clients who, having returned to health, have joined our fitness clubs.
At the same time, we've established a interface, and, with the cooperation of local governments, are conducting classes to improve the health of groups that aren't familiar with fitness.
CBI: Does Renaissance have a five year plan? If so, what does it hope the company will look like then?
MY: Renaissance makes use of a three-year plan to guide and grow our business.
In addition, we've implemented a medium-term plan, firmly targeting the year 2020, when the Tokyo 0lympics will take place.
We don't specify the exact number of facilities because the contracts for some clubs will expire. Having said that, our goal is to achieve sales of $887.3 million, and an operating profit of $88.7 million from our fitness and healthcare activities, and from new business development.
We intend to pursue new opportunities, while instituting structural reform.
CBI: Recently, you've opened new facilities in Hiroshima and Vietnam. Could you tell us a bit about thouse clubs and about Renaissance's ambitions beyond Japan?
MY: A Renaissance club that operated in Hiroshima for a long time, but had closed, was recently replaced by a new one located in Hiroshima Higashi Senda, the city's cultural area.
Also, for the first time, a professional Japanese baseball team, Hiroshima Carp, has developed a fitness facility that's an integral part of its baseball stadium. It reflects quite positively on Renaissance's other clubs.
Initially, in Vietnam, we established a joint venture to explore the possibility of opening clubs in the country, but, following deregulation by the government, we were able to found a company wholly owned by Renaissance.
We opened a small fitness facility with a gym in the AEON Mall, in Binh Duong Province, and then, in 2015, a large-scale fitness club in AEON mall shopping center in Long Bien, Hanoi, in October 2015.
The latter includes a gym, a studio, a swimming pool, and a Japanese-style spa, and is developing a Japanese-style swimming school.
In the future, we'd like to expand our consulting business, sharing our expertise with respect to fitness, swimming, and aging populations, primarily in Southeast Asia.
CBI: It's important to note that, in addition to holding several important positions at Renaissance, you're also the chairman of the Fitness Industry Association of Japan (FIA). Tell us a bit about that organization and its activities.
MY: FIA operates much the way that IHRSA does. It's defining goal is to help develop a strong industry by providing its members with valuable fitness-management information,conducting research and studies, and holding workshops and seminars.
It also, promotes consumer protection, and offers guidance with respect to laws and regulations affecting the industry.
If we're truly going to effective in promoting healthy lifestyles in Japan,we have to enhance the management capabilities of club operations.
The FIA does so,in part,by promoting the Fitness Club Managers Skill Test,one of several nationally recognized exams.
It has three levels,ranging from basic,for people who are about to begin working in clubs,to the top tier,for management-level executives.
We intend to launch a new program to thoroughly study management skillsーsomething that's difficult to do on an individual-company basis.
I'd also like to establish a system to encourage FIA members to act cooperatively with one another to advance our goals with government bodies.
CBI: Your role at FIA provides you with a unique view and understanding of the Japanese health and fitness market, which, like club markets worldwide, seems to be evolving rapidly. What sorts of changes are you seeing?
MY: Japan is much like other countries in that the number of small clubs specializing in certain service categories is increasing rapidly.
It's easy to open such clubs, since the initial investment may be quite small, and the other barriers to entry are low.
As a result, it's expected that the number of such facilities will continue to climb. One of the positive outcomes is that the membership penetration rate in Japanーwhich is extremely low compared to that in Western countiesーーwill definitely go up.
I think it's quite important for us to always be attentive and responsive to information from Western counties, and to do whatever we can to promote further development in Japan.
CBI: In addition to the rapid proliferation of studio and boutique offerings, one of the most disruptive developments in the U.S. has been the advent of online and virtual fitness programming. What sort of effect is that having in Japan?
MY: I think that online and virtual fitness programming is an effective way to motivate people and connect them with more of their peers.
In recent years, as in the U.S.,it's becomes ubiquitous here in Japan.
Cycle &Studio R Shibuya, which Renaissance opened recently in association with Les Mills,makes use of virtual technology to engage members,particularly throes who are 20 to 30 years old. It's the first program of its kind in Japan, and we're convinced it's going to be very popular.
CBI: For someone unfamiliar with the Japanese market, how would you describe it in terms of its composition, current strength major growth opportunities, and the ways in which it differs from the U.S. market?
MY: One important distinction is that,in Japan,we have a national health insurance system, with people paying just 10% to 30% of the cost of medical services to obtain treatment.
Since the cost is quite small, many people are more inclined to go to a hospital when they get sick, rather than to pay attention to the concept of illness prevention.
However, given population decline and an aging society, if no change is made to the country's current policy, the health system will eventually, undoubtedly, fail. Therefore, there's a pressing need to be aware of the situation, and to take action to inspire people to take responsibility for their own health ----for becoming, and remaining, healthy.
CBI: Finally, what do you, personally, find most exciting about working in this industry?
And what, if anything, do you find most frustrating?
MY: Personally, and professionally, one of my principal goals is to help create a society where people are committed to being healthy.
I want the members of our clubs to feel and experience excitement and satisfaction in achieving their goals; I want them to be freshly motivated, in their daily to continue attending their club for years to come.
I also want the people who work in our clubs to savor the same sort of excitement and satisfaction. ...So striving to achieve that is what I find most exciting.
Not being able to accomplish even more is what I find most frustrating.
Masaaki Yoshida, 60, was born in Osaka, Japan, and earned a bachelor's degree in economics from Kyoto Sangyo University, in Kyoto.
Now the executive president and representative director of Renaissance, Inc.,a leading Japanese club brand that owns and operates, or manages, a total of 150 facilities.
Yoshida embarked on his industry career with People Co., Ltd., which was subsequently renamed Konami Sports Club Co., Ltd., eventually becoming the chain's senior managing director and managing director business development.
He joined Renaissance in 2004 initially as vice manager sales and manager of business development, and has since served in a number of executive-level capacities.
He assumed his current posts last year.
Yoshida also the chairman of the Fitness Industry Association of Japan (FIAJ), an industry trade group. He and his wife reside in Yachiyo, in the prefecture of Chiba, and have two children.