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Alex Rodriquez Andrew Burton/Getty Images

Alex Rodriquez Aims to Profit from Retail Crisis with Gym Push

The U.S. health-club industry grew 7 percent to $27.6 billion in revenue last year, according to the International Health, Racquet & Sportsclub Association.

(Bloomberg)—For former New York Yankees slugger Alex Rodriguez, the retail crisis isn’t such a bad thing.

Rodriguez, who counts billionaire investor Warren Buffett as a business mentor, has the license to open UFC-branded workout gyms in the Miami area. And with stores at shopping centers closing at a record pace, A-Rod and his partner are searching for shuttered brick-and-mortar locations to fuel their expansion in South Florida.

“It plays right into our wheelhouse,” Rodriguez, 42, said in an interview. “There’s not a lot of people looking for 40,000 square feet in shopping centers.”

Rodriguez, who made more than $400 million during a baseball tenure that was tarnished by performance-enhancing drugs, is forging a second career in the fitness industry. The former shortstop has spent the past few years helping open a chain of gyms in Mexico called Energy. His partner in that venture was Mark Mastrov, who co-founded 24 Hour Fitness and is part-owner of the Sacramento Kings.

Now the pair looks to capitalize on the growing popularity of the UFC brand, named for the Ultimate Fighting Championship. In March, they took over an existing UFC location in Kendall, Florida, where Rodriguez grew up. That gym is celebrating its grand opening under the new owners this week.

A-Rod is scouting locations for roughly 12 more gyms in the area. He said he hopes to have at least two or three “letters of intent” for new locations signed in coming months. In all, there about 120 U.S. workout gyms under the UFC banner.

Boutique Studios

The U.S. health-club industry grew 7 percent to $27.6 billion in revenue last year, according to the International Health, Racquet & Sportsclub Association. One of the fastest corners of the fitness industry has been boutique studios, including CrossFit and SoulCycle. UFC, the popular mixed-martial-arts association, launched its chain of gyms in 2009. The facilities offer a variety of workout classes and training programs.

Rodriguez, who started his Major League career with the Seattle Mariners in 1994, founded A-Rod Corp. to manage his business investments. He said he watched other athletes retire after successful careers and run into money trouble, and wanted to make sure he had businesses with good cash flow. In addition to fitness, Rodriguez also has a presence in the real estate industry and is an analyst on baseball broadcasts for Fox Sports.

“I was thinking about retirement probably my first day in the big leagues,” he said. “Fear was the thing that drove me to start investing.”

Rodriguez, who was dogged by allegations of steroid use during his career, was suspended from baseball for the 2014 season for using performance-enhancing drugs. He spent some of that time taking business classes. He also leans on Buffett for advice, though he didn’t check with the Berkshire Hathaway Inc. chief executive officer before investing in the UFC gym business.

“I understand his philosophies, as much I can understand them,” he said. “This is one he would have approved of.”

To contact the reporter on this story: Craig Giammona in New York at [email protected] To contact the editors responsible for this story: Nick Turner at [email protected] Lisa Wolfson

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