ORLANDO, Fla. — Manhattan's largest gym chain's attempt to stabilize its revenue is starting to pay dividends.
The owner of more than 100 New York Sports Clubs said Monday at the ICR Xchange Conference here that revenue in the fourth quarter was $109 million, less than the $114 million it pulled in last year.
Despite the revenue shortfall, investors jerked its shares up 15 percent to close at $7.19.
But, there is still a long way to go for parent Town Sports International as it converts most of its 107 New York Sports Clubs into much lower-priced model.
Shares have fallen 40 percent in the last 12 months.
On Monday, it converted 10 New York Sports Clubs, mostly in Brooklyn, that used to charge $69 a month to gyms that offer memberships at $19.95 a month after a $199 initiation fee.
"We started losing the student market," to Planet Fitness and other relatively new low-cost competitors, Town Sports CEO Robert Giardina said. "We need to attract students. Students are our mainstay."
He says New York Sports Clubs are offering more trainers and equipment with added group exercise classes than the no-frills Planet Fitness does.
Town Sports expects to double its membership at the converted clubs from an average of 2,500 to 5,000.
Giardina said that including Monday's 10, conversions total 91 of the chain's 158 gyms to the new model. (It also owns Boston, Washington and Philadelphia Sports Clubs.)
In the second quarter of 2014, when the company announced plans to severely drop prices, it predicted it would convert only 20 of its most underperforming gyms by the end of the year.
However, the strategy has proved successful, and new members mean more immediate revenue.
Time is also of the essence. January is the biggest month for gym membership, Town CFO Daniel Gallagher told The Post, saying 15 percent of new members join this month.
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