business and economy

By JANE ROBERTS
Scripps Howard News Service
Tuesday, May 15, 2007

In the first big sales of the year, cotton is beginning to move out of Memphis warehouses into the world market.

In mid-April, the United States shipped 362,000 bales, a record high for the year that began Aug. 1, followed by 346,000 bales the last week of April.

But because sales are coming so late in the season, few merchants expect the United States will be able to export the 13.5 million bales the government predicted as late as April.

At this time last year, the United States had sold 14.9 million cotton bales to overseas customers. Early this month, it had orders for 10.6 million bales.

"It makes it very clear that we are a supplier of last resort," said Carl Anderson, professor emeritus at Texas A&M. "This makes the U.S. cotton crop vulnerable because foreign markets will move their cotton first and let the United States pay to store the surplus."

To achieve the U.S. Department of Agriculture's export estimate, cotton shippers would have to ship 453,000 bales a week from now to the end of July when the marketing year ends.

"I don't think it's going to happen. They would have to have a majority of those orders already in their hands," said John Raffety, vice president of Memphis Compress, a shipper-owned warehousing company. "It's been slower than normal here."

If sales continue at the current pace, shippers worry about finding enough trucks and containers to carry out the feat.

"It comes down to availability of equipment," said William May, president of the Memphis-based American Cotton Shippers Association. "There's been a lot of movement in other commodities, and that means we are competing with them for equipment.

"It's a tight supply for everyone, and fuel costs are putting extra burdens on pricing."

Until this year, U.S. cotton moved quickly off warehouse shelves, in large part because a taxpayer-subsidy _ called Step 2 _ paid cotton exporters and textile companies to buy American cotton when it was more expensive than other cotton.

Last summer, the United States was forced to drop the subsidy in a battle decided by the World Trade Organization.

Without the subsidy, U.S. cotton is the most expensive in the world. While local merchants said China -- the world's largest consumer of cotton -- would ultimately have to buy U.S. cotton to maintain production, it found plenty of cheaper cotton elsewhere.

"The very cheap cotton out of India has been marketed, and as Indian prices have firmed up, U.S. prices have dropped, which has allowed us to grab a little market share," Nicosia said.

But he is far from relieved. "We're still substantially low in sales."

For warehousers, that's good news because they make their money on storage costs. Memphis Compress, for instance, charges $3.75 a month per bale and more if special handling is required.

But for merchants and U.S. taxpayers, the price of cotton has cost them a fortune in storage alone.

Farmers who don't want to risk selling their cotton in the fall, when the market is traditionally low, can put their crop in a government loan while they wait for the price to rise.

This year, because the price has been low, more farmers have kept their cotton in the loan. Today, about 10 million bales are still in the loan, compared to 6 million at this time last year. Taxpayers pay $2.66 a bale per month to store it. Most has been in storage since November.

"Everybody was hoping last fall that China would come in and buy a large amount of cotton," Anderson said. "It hasn't happened yet."

By JANET MOORE
Minneapolis-St. Paul Star Tribune
Tuesday, May 15, 2007

Sara doesn't want her last name revealed, or where exactly she lives. She is too embarrassed to discuss her condition _ severe menstrual bleeding.

She could barely leave the house. The last straw was a family July Fourth vacation up north when she couldn't swim in the lake.

Earlier this year, she opted for a treatment offered by American Medical Systems that freezes the lining of the uterus. The 20-minute procedure, performed in her gynecologist's office, worked. "I'm delighted," she says.

About 18 million women in the United States suffer from excessive menstrual bleeding, a condition called menorrhagia usually caused by hormonal imbalance or uterine fibroids. Treatments range from birth-control pills to a hysterectomy, in which a woman's uterus is removed.

American Medical Systems' treatment, HerOption cryoablation therapy, uses subzero temperatures delivered by a probe to the inner lining of the uterus, which is responsible for excessive bleeding.

Other devices that target the uterus wall exist, but the company says HerOption is the only one approved by the Food and Drug Administration (FDA) for use in a doctor's office instead of an operating room.

The average cost of HerOption is $2,600, and the procedure is covered by Medicare and most private insurers. Company executives say the market could reach $50 million to $100 million in the next three to five years.

"We've been steadily adding more and more sales people who are working with physicians" to spread the word, said Martin Emerson, president and CEO of Minnetonka, Minn.-based American Medical Systems.

It has taken the company about five years to fully roll out the product, as it wrangled to secure insurance coverage. Now the challenge is to win over physicians, who already have a number of viable options to treat menorrhagia by endometrial ablation, the destruction of the uterus wall.

Since 1997, the FDA has approved five such devices, some of which use heat, radio frequency, balloons filled with saline and microwave energy to treat the condition. All have high levels of success and patient satisfaction, according to a 2005 article in the medical journal OBG Management.

The Mayo Clinic, for example, uses a device powered by ultrasound technology that heats the wall of the uterus, said Dr. Andrew Good, a consultant in the division of gynecology. He's pleased with the results and sees little reason to switch therapies.

"It really depends on physician preference," he said. "They're all pretty much the same as far as effectiveness goes."

Which explains why American Medical Systems is selling HerOption almost exclusively to gynecologists who can use the device in the office. The procedure requires only a local anesthetic in most cases, and patients often drive themselves home afterward.

Common side effects include mild cramping and a watery discharge after the procedure. Women who want to have children should not consider the treatment because the procedure destroys the endometrial lining, which must be intact during a normal pregnancy.

"You're not going to the hospital for a day of surgery," said Dr. James Presthus, an Edina, Minn.-based gynecologist. "There are no incisions or hormones. There's a patient satisfaction rate (with HerOption) of 94 percent."

An office-based procedure is also cheaper than one in a hospital, said Good. "If you go into the OR, you're paying for all the safeguards a neurosurgeon, or cardiac surgeon, may need _ even though you don't need them with these procedures," he said.

"Patients probably don't care where they go (for a procedure), as long as people are competent," Good added. "Obviously, if you have something where you can walk in, where you're not put to sleep, but sedated, and then able to walk out, that's really nice."

(Contact Janet Moore at jmmoore@startribune.com.)

By MAX MESSMER
Scripps Howard News Service
Tuesday, May 15, 2007

"WORK HISTORY: My first job was working in an orange juice factory, but I got canned because I couldn't concentrate."

At least your employer didn't put the squeeze on you.

The example above is the first sentence of a lengthy and fictional work history offered by an accounting applicant who is a bit too clever for his own good. Instead of leading with his real work history -- which he unwisely buried at the bottom of his resume -- the job candidate presented a farcical account of his professional experience. Here is the rest of his attempt at creative writing:

"WORK HISTORY: I also worked in the woods as a lumberjack, but I couldn't hack it, so they gave me the axe. Next, I tried working in a muffler factory, but that was too exhausting. I attempted to be a deli worker, but any way I sliced it I couldn't cut the mustard. I managed to get a good job working for a pool maintenance company, but it was too draining. My last job was working in a coffee shop, but I quit because it was always the same old grind."

This resume underscores three important points.

First, always be truthful and straightforward in your job-application materials. Even if you intend for a statement to be taken as a joke, a hiring manager may not understand or appreciate your satire.

Second, be succinct. Hiring managers simply don't have time to wade through longwinded resumes.

Third, be careful when using humor, which doesn't always translate through writing.

Here is another candidate who tried too hard to be witty:

"HONORS: Recipient of Time magazine's 2006 Person of the Year Award."

When Time named "You" the honoree, the magazine meant everyone on Earth.

Finally, don't include irrelevant information in your resume -- especially if you're sharing the following detail:

"ADDITIONAL INFORMATION: My humor has caused people to snort milk out the nose."

Keep the Resumania coming. Examples can be sent to Resumania, c/o Robert Half International Inc., 2884 Sand Hill Road, Suite 200, Menlo Park, Calif., or faxed to 650-234-6998.

(Max Messmer is chairman and CEO of Robert Half International Inc., a specialized staffing firm, and author of "Managing Your Career For Dummies" and "Job Hunting For Dummies." For more Resumania, please visit www.resumania.com.)

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By JOHN REBCHOOK
Scripps Howard News Service
Monday, May 14, 2007

It's a big house for a big man.

Carmelo Anthony, the 6-foot-8 superstar forward for the Denver Nuggets, has bought the sprawling Sognare Estate mansion near Littleton, Colo. Listing price: almost $12 million.

Anthony bought the home, which some sources list as having more than 25,000 square feet, from a former Qwest executive who, as part of the deal, will get the basketball player's house in Lakewood, Colo.

Former Qwest Executive Vice President Stephen Jacobsen built the house after pocketing almost $50 million in company stock when the Denver telco was flying high.

The 22-year-old basketball player's purchase of the Tuscan-style home on almost six acres in Polo Reserve has kept real estate brokers buzzing for more than a month.

The home was originally listed at $17 million in 2004, which was then the most expensive house on the market, but last year the price was slashed to $11.95 million.

Although the sale and the purchase price have not been recorded with the Arapahoe County assessor's office, Anthony's agent, Calvin Andrews, confirmed the sale to the Rocky Mountain News last week.

The house is in unincorporated Arapahoe County, according to the assessor's office, which put the taxable value of the home at $11 million.

"He already bought it," Andrews said by mobile phone. "He moved in last week."

The estate was built in 2002. It includes seven bedrooms, nine bathrooms, a 5,000-bottle wine center, an 11,000-square-foot barn, hand-cut limestone floors, a Brazilian mahogany paneled library and a recording studio.

The finished square footage has been described in various marketing material as ranging from 21,084 square feet to 25,610 square feet.

But basically, Anthony doubled the size of his 12,130-square-foot Lakewood home, which he bought in 2004 for $3.5 million.

One amenity that appealed to Anthony was the recording studio.

"It is absolutely state of the art and a very modern recording studio," Andrews said. "I would not say it was high on his criteria, but it probably pushed him over the edge to buy it. Carmelo wants to do more and more with his record label (Kross Over Entertainment)."

What the house includes:

_ A house with as much as 25,610 square feet.

_ Eight fireplaces

_ Seven-car garage

_ A swimming pool, fountains and waterfall

_ A 11,000 square foot barn "worthy of a Triple Crown hopeful."

_ Hand-cut pillowed limestone floors

_ A Brazilian mahogany library

_ Copper-clad French doors

_ 5,000-bottle wine cellar

_ A professional-grade recording studio

Source: Marketing Material Released In 2004 By Fuller Towne & Country Properties.

By DALE KASLER
Sacramento Bee
Monday, May 14, 2007

First it was houses. Now it's cars.

Motor vehicle sales fell a resounding 7.6 percent in the United States last month, and analysts said the troubled housing market was a chief culprit. That could be worrisome for an economy already showing signs of cooling off.

The sales decline was particularly bad in California and Florida, two states feeling the worst of the housing downturn. That was no coincidence.

The weak housing market is eating into vehicle sales in two important ways.

First, consumers who had been tapping their home equity to buy cars during the housing boom are less apt to do so when the real estate market is soft. The shaky housing market also is having a psychological effect.

"There's consumer uncertainty. Housing is really having a big impact," said Jesse Toprak, executive director for industry analysis at the Edmunds.com car-buying Web site.

Second, building contractors are buying fewer pickups, vans and other vehicles _ a major part of the market _ for their fleets.

"Suddenly your homes aren't selling _ the last thing you're going to do is go out and buy another truck," said Ron Pinelli, president of Autodata Corp., a market research firm based in New Jersey.

Beutler Corp., a Sacramento, Calif.-based heating and cooling contractor, normally buys 20 or 30 pickups and other vehicles a year. But this year, Beutler might not buy any _ not after having trimmed its payroll in half, to about 900 workers, since 2005.

"You don't need new trucks for expansion," said Rick Wylie, the contracting firm's president.

Although state-by-state figures for April aren't yet available, analysts say the biggest dropoff in auto sales is occurring where housing has taken the biggest tumble. Through February, the most recent data available, car sales in California were down 3.1 percent compared with the previous year's figures, according to the state Department of Finance.

Auto analyst Art Spinella, head of Oregon-based CNW Marketing Research Inc., said California and Florida account for "the vast bulk of the decline" in the nation's vehicle sales in April.

"So many car sales in California are home equity-based," Spinella said. "Less equity, less money."

Many analysts say the auto industry's struggles are a kind of testament to the power of the housing boom. The increase in market values created a gigantic wealth effect among homeowners, many of whom tapped into their home equity for cash.

Cash generated by housing _ from home-equity loans, refinancings and outright sales _ accounted for $182 billion in consumer spending in 2005, according to a just-released report by former Federal Reserve Chairman Alan Greenspan and Fed economist James Kennedy. That accounted for about 3 percent of all consumer spending, the study said.

By contrast, cash from housing totaled just $64 billion in 2000, the study said. Now fewer homeowners are using their houses as cash machines.

"Nobody can pull money out of their houses so nobody has the cash to buy a new car," said Chris Thornberg of consulting firm Beacon Economics in Los Angeles. "That was the game."

The record-setting stock market notwithstanding, Thornberg said there's evidence the economy is tailing off. "Consumers have finally run out of steam," he said.

(Dale Kasler can be reached at dkasler(at)sacbee.com)

By JONATHAN B. COX
Raleigh News & Observer
Thursday, May 10, 2007

Genel Webb works 10-hour days and doesn't get paid. But she loves it.

"It's been more rewarding than my 20-year career," said the mother of two.

Webb, 44, left Verizon Communications in July 2005 when the company decided to reduce its work force.

She set up office in her Fuquay-Varina, N.C., home and set out to start an elder-care business; CenterPeace Companion Care now employs 10.

"It was not my goal to retire from Verizon," she said. "I always had the sense that I would do something different."

Webb represents a new current of entrepreneurship that is coursing through North Carolina in the wake of mass layoffs, population growth and other economic shifts that have roiled and reshaped the state this decade.

Established companies still account for most employment, but in the past year, jobs among startups and the self-employed grew more than twice as fast.

"The entire 2001 through 2004 was the time when all of us who focus on entrepreneurship were checking our phones to make sure they were still connected," said Mark H. Mirkin, a lawyer with Williams Mullen in Research Triangle Park, near Raleigh. "We have seen a comeback, with a vengeance."

Manufacturing and technology workers thrown out of work have opened restaurants and shops _ some by choice, others because they couldn't find other jobs. Retirees who migrated to Asheville and Wilmington are supplementing incomes by consulting. Residents are seizing the opportunity to provide services for newcomers.

Venture capital that evaporated when the economy contracted has returned, giving sustenance to big ideas that could become the next big technical, medical or pharmaceutical breakthrough.

And more entrepreneurs are getting help from the government. The number of loans made to North Carolina companies by the Small Business Administration in the past five years has more than doubled, according to data from the federal agency, exceeding national loan growth by 45 percentage points.

"We're in an economy that's in a state of flux. Old industries are declining, decaying. New industries are sprouting up," said Mike Walden, a North Carolina State University economist.

"That's very fertile ground" for entrepreneurs.

The most successful of them can shape a city. But they also bring risk. Startups are fragile. A downturn in the economy can stamp them out. A marketing misstep can prove fatal.

Indeed, an estimated one-third of new businesses fail within two years.

David Braaten has beaten the odds -- so far. Among his secrets: Sound effects.

"You're dealing with small people who don't want shoes put on their feet," said Braaten, 32, the proprietor of Trendy Toes Children's Shoes in Cary.

So Braaten gets creative. He makes airplane sounds to put his little customers at ease.

"I absolutely love the interaction," he said. "I tell my wife it's the best job I've ever had."

Like a lot of people, Braaten tried for years to find happiness at work. He took different jobs but never found a niche.

His wife's family had a long history in the shoe industry, so Braaten decided to give it a shot.

His store, a colorful place with checkerboards, backgammon and other games on the carpet, opened last summer. It stocks athletic, casual and dress shoes for newborns up to youth size six. Braaten promises friendly service and a proper fit.

Building the business was more challenging than he expected.

"The nice thing is, when you first start a business you don't know anything," Braaten said. "Once you get into it, you realize how hard it really is."

For two decades, Webb improved processes, added automation and fixed problems at Verizon.

But she was unfulfilled. She was reading "48 Days to the Work You Love," which helps people turn passions into profits, when she volunteered to leave.

"It was so timely," she said. "I felt like a door was being opened."

Growing up in Bladen County, N.C., Webb learned compassion. Her mother and grandmother owned a facility for the elderly there.

When a friend in New York was disabled by a stroke, Webb hatched her idea. Her friend was crying one day when Webb called, because she struggled to get into bed. Webb found a company that sent an employee in every other day to help.

CenterPeace does almost exactly the same thing. For $16 an hour, the company will send workers to visit elderly clients, remind them to take medicine, do light housekeeping and pick up prescriptions. In May, it was also licensed to provide in-home services such as bathing. It charges $20 an hour for that.

"There's a lot of opportunity," said Webb, who intends to start taking a salary this year. "There's a lot of need."

By PHILIP JACKMAN
Toronto Globe and Mail
Thursday, May 10, 2007

In a furious rush in the morning? Torn between getting a caffeine jolt and jumping into the shower? Seriously considering taking your coffee into the shower with you?

Agonize no more. A company in Fairfax, Va., offers a soap that releases caffeine right through the user's skin and straight into the bloodstream.

It's called Shower Shock. Jennifer Kuropkat of the U.S. manufacturer, ThinkGeek, told the Toronto Globe and Mail that soaping up with her company's product provides the same amount of caffeine as two cups of coffee.

The firm, which makes other caffeine products, came up with the idea a while ago when it "recognized the need for extreme ease of obtaining your caffeine," she said. "You have to have a coffee, you have to have a shower, so you can kill two birds with one stone."

So the company consulted a soap maker and settled on a formula "that would be legally acceptable in the U.S. and smell nice as well." (It's scented with peppermint oil.) Consumer response was so encouraging, she says, they've since branched out into "travel-sized" soap bars. A month ago, they launched a "glowing green" caffeinated shower gel.

And if you're nowhere near a shower and need a jolt? Well, you could always try the company's caffeinated lip balm.

Or you could have a cup of coffee.

By ANNE KRISHNAN
Raleigh News & Observer
Wednesday, May 09, 2007

Executives at The Redwoods Group always thought that the Morrisville, N.C. insurance company's compensation and benefits were fairly generous.

The company paid 80 percent of health insurance premiums for employees and their families. A couple of years ago, it raised its minimum salary to $25,000 a year.

Then last month, CEO Kevin Trapani learned that children in three of his employees' families were on Medicaid.

"We were shocked by that," he said.

It was a simple decision to do something about it, he said. The company now pays the full health-insurance premiums for employees who make $35,000 a year or less, as well as for their children. Workers who make up to $40,000 a year have 90 percent of their premiums paid.

About one quarter of the company's 103 workers are affected by the changes. They process data for Redwoods, gather information and issue policies, bills and invoices.

"We've been blessed with good fortune, and these folks are struggling," Trapani said. "It is our responsibility."

The Redwoods Group's decision to shoulder more health-care expenses is decidedly countercultural, as other companies are shifting the burden onto workers. Many employers are considering high-deductible health plans, which hold down premiums, but require consumers to pay thousands of dollars if they seek medical care.

But more companies are starting to consider how much low-income workers have to pay for medical insurance, said Don Hardin, a senior health-care consultant at Mercer Human Resource Consulting in Charlotte, N.C.

Although companies have tossed around the idea of basing employees' contributions on their income for 20 years, "over the past five years, it has really begun to take hold as employers are seeing more and more of their lower-paid employees waive coverage," Hardin said.

Low-income employees are more sensitive than other workers to higher health-care costs, said Mark Holmes, vice president of the N.C. Institute of Medicine, a nonprofit group focusing on health policy. The fastest-growing segment of the uninsured population is the working poor, he said.

Offering those employees health insurance is a good strategy for attracting and retaining workers in a tight labor market, Holmes said. What's more, employees with health insurance are happier and more productive, he said.

At Redwoods, taking care of employees is part of a larger emphasis on social responsibility. Its business, providing property and casualty insurance for YMCAs, Jewish community organizations and dentists, is aimed at helping customers change their operations to reduce accidents, illness and death, Trapani said.

The company also pays employees to volunteer 40 hours each year at nonprofit organizations and runs internal programs encouraging community engagement. In 2006, the company donated $499,732 to charitable organizations such as Habitat for Humanity and a project focusing on AIDS prevention in Namibia.

Redwoods will spend an additional $30,000 a year to cover the rest of its lowest-paid workers' premiums, Trapani said.

"That's money that will be much more valuable to people who have no question that they can get their kids to the doc if need be," he said. "How do you put a price on that?"

But make no mistake, Redwoods is a business.

The 10-year-old company had revenue of $13.3 million in 2006, up 16 percent, and it reported net income after taxes and charitable giving of $295,381. It underwrote $58 million in premiums, up from about $50 million in 2005.

Strong business basics allow Redwoods to be generous to the local and global community, Trapani said.

"We're a responsible, quantitative, disciplined, hard-working bunch, and we run a company that's going to be here for a long time," he said. "We can't just give away all our money and be a bunch of Birkenstock-wearing, granola-eating guys. That's not how it works."

The company's philosophy is good for business, as well, he said. Its benefits, including $5,000 in annual college tuition for each of its employees' children, contributed to a turnover rate of just 3 percent in 2006. That makes for a knowledgeable group of employees who trust and challenge each other and provide great service to customers, Trapani said.

Redwoods' financial success is building credibility for its business model and winning admirers, he said. Trapani fields calls from other employers interested in Redwoods' initiatives and said he hopes the company's new health insurance structure catches on.

"We have an awful lot of people wondering about this kind of stuff," he said.

By ADAM WILMOTH
The Oklahoman
Wednesday, May 09, 2007

A 40 percent increase in the price of gasoline in the past three months has led to a new flurry of an old suggestion on how to keep gasoline prices from soaring higher.

Unfortunately for consumers, most of the popular e-mailed recommendations oversimplify a complicated issue and ignore many economic principles.

One of the most popular e-mail versions tells consumers not to buy any gasoline on May 15. The petition claims that if everyone boycotts gasoline stations on the same day, "the oil companies would choke on their stockpiles," and that the protest would cost the industry more than $2.2 billion.

The country's producers keep millions of barrels in reserves nationwide to prevent shortages occurring during times of peak gasoline usage. A successful boycott could potentially increase reserves for the day, but is unlikely to have a long-term effect because the consumers who avoid gasoline stations on the 15th probably will have to refill later in the week, University of Oklahoma economist Robert Dauffenbach said.

"Buyer strikes of a one-day duration, I have little confidence in," he said. "Buyer strikes of a month -- there you're talking. The problem is we all have to get to work somehow."

The e-mail suggests a similar effort in April 1997 caused gasoline prices to drop 30 cents a gallon overnight. Records from both AAA and the U.S. Energy Information Agency, however, show the price was relatively constant that month at about $1.18 a gallon.

Another popular e-mail urges consumers to boycott the world's largest oil company, ExxonMobil, for the rest of the year.

That effort has received nearly 100 percent participation in Oklahoma for many years (four Exxon- and Mobil-branded stations are in the state). Still, prices continue to climb. The problem with boycotting one brand is that stations buy fuel from suppliers who also sell to other brand stations.

The suppliers and producers all will get their money, regardless of which branded station they sell to. The people most likely to be hurt by such a boycott are the gasoline station owners, who are almost all local franchise owners, said Vance McSpadden, executive director of the Oklahoma Petroleum Marketers Association.

"You're not hurting the oil companies at all," McSpadden said.

Many factors affect fuel prices, but much of the issue centers on supply and demand. Supply increases are lagging demand in part because many of the world's largest fields have been tapped. Energy companies say environmental regulations also restrict supply by preventing companies from drilling in certain areas and by making it difficult for companies to build new or expanded refineries.

At the same time, demand continues to soar as more people worldwide are increasing their energy usage. Environmental groups blame inefficient vehicles and appliances for contributing to the problem.

In any event, the effort to calm soaring and fluctuating gasoline prices will require more than a mass e-mail movement among consumers.

"The problem is we're four years into high prices, and our usage of fuels continues higher and growing," Dauffenbach said. "It's only by really cutting back on usage are you going to hope to get lower gas prices."

By DAVID ARMSTRONG
San Francisco Chronicle
Wednesday, May 09, 2007

Yao Ming couldn't quite carry his Houston Rockets into the second round of the National Basketball Association playoffs, but the Chinese star plans to carry the 24 Hour Fitness chain into China when it opens its first workout club in Beijing in August.

Tapping Yao as its China pitchman and equity partner, 24 Hour Fitness Worldwide plans to open 20 to 30 workout facilities in the next five years throughout China, which it sees as a great growth market.

Privately held 24 Hour Fitness will operate in China through its wholly owned subsidiary California Fitness. There are already 10 California Fitness clubs in Hong Kong and another six in Taiwan, to go with some 370 of the 24 Hour Fitness outlets in the United States, said company chairman and founder Mark Mastrov.

But the biggest prize in the Asia Pacific region is fast-growing China, where Yao is a national hero whose every move attracts attention.

"He is the most famous and most respected sportsman in China," Mastrov said, "and he loves to work out. He goes right to the gym as soon as he hits a city."

Yao, a 7-foot-6-inch center and NBA all-star who is expected to anchor the Chinese men's team in the Beijing Olympics next year, said in a telephone interview from his home in Houston that "24 Hour Fitness is a very successful company, and not just in the U.S., but internationally. It's an honor to work with them."

"A professional player like me can keep in great shape and enjoy life," Yao said. "I really enjoy workouts. I just want to let people know, tell them they can enjoy being fit."

Yao is not new to endorsements. Since leaving his hometown team, the Shanghai Sharks, to play in the NBA in 2002, he has at various times done TV commercials for the likes of Visa, Coca-Cola and Reebok. But with 24 Hour Fitness, Yao is going beyond simply lending his name. He will be an equity partner in the California Fitness China venture and is also involved in designing the clubs, according to both Mastrov and Yao.

"In Beijing, I will open the first club this summer," Yao said. "It will have half-court basketball, weightlifting, cardiovascular equipment. I'm telling them what kind of music Chinese people like to listen to when they exercise: a little bit of pop, not too much."

24 Hour Fitness, which Mastrov, an Oakland, Calif. native, started with one San Leandro, Calif. outlet in 1983, does not release profit and loss figures. But the company said it had revenue of $1.12 billion in 2005, and employs 16,000 people. In 2005, Forstmann, Little & Co., a private equity company, bought 24 Hour Fitness for a reported $1.6 billion.

As China's new middle-class consumers buy cars, devour Western-style fast food and log ever-more TV and Internet time, they are, like their couch potato Western counterparts, fighting a battle of the bulge.

"In China, in the last 20 years, people are doing better, but they need more fitness," Yao said. "But it's not just buying nice dresses and cars, it's knowing how to enjoy a healthy life."

Katie Rollauer, senior manager for research at the International Health, Racquet and Sportsclub Association, said fitness is a relatively new idea in China and its region: "Right now, in Asia, the health club scene is similar to how it was in the U.S. in the 1970s: kind of the Wild West, with lots of local operators."

Industry experts say that fitness clubs in Asia differ from clubs in this country by putting much more emphasis on group exercise and by marketing themselves as places to socialize. "You can't just go there and install an American model," Rollauer said.

The premiere Beijing club, according to Mastrov, will be 40,000-square feet plus, with Yao's likeness prominently featured in signage and marketing. The club will also have a special air purification system, he noted. Such features are needed in Beijing, where the atmosphere is made gritty by heavy manufacturing, rampant construction, the growing number of automobiles and sandstorms blowing in from the Gobi Desert.

"We want to be as green as possible," Mastrov said. "We have got a purifier for our air. The air is not so great in Beijing."

Mastrov said Yao is a welcome addition to the company's roster of superstar athletes, which includes Andre Agassi and Lance Armstrong.

"I like Yao as a person. He fits our brand," said Mastrov, who spent time with Yao in China. "He's very focused on the environment and on kids. We went to the gym, where there were six Chinese teenagers over 7 feet. He lit up like a candle, showing them how to move in the pivot, how to chase down a loose ball. It was amazing to how energetic he was."