At-home fitness equipment manufacturer BowFlex has filed for Chapter 11 bankruptcy, agreeing to a deal that could see Matrix parent company Johnson Health Tech Retail acquire it for $37.5 million.

Johnson Health Tech will operate as BowFlex’s stalking horse bidder, allowing them to acquire all company assets at the close of the transaction, less closing adjustment amounts for accounts receivable, inventory and certain transfer taxes. Other interested parties will have the chance to submit competing offers, but if none beat the $37.5 million price already agreed upon by BowFlex and Johnson, the sale will go through. 

Subject to court approval, BowFlex will also receive $25 million of debtor-in-possession financing from SLR Credit Solutions and its affiliates. Those funds will enable BowFlex to continue its normal operations and meet its financial obligations to employees, vendors and its continued provision of customer orders during the bankruptcy proceedings and while executing the sale process.

“For decades, BowFlex has empowered healthier living and enabled consumers to reach their fitness goals with our innovative home fitness products and individualized connected fitness experiences,” said Jim Barr, BowFlex CEO. “As a result of the post-pandemic environment and persistent macroeconomic headwinds, we conducted a comprehensive strategic review and determined this was the best path forward for our company. We are fortified by the potential partnership with Johnson Health Tech and encouraged by the multiple parties that have indicated an interest in bidding for our company. Our goal is to maximize value for our stakeholders through this process.”

At-Home Fitness Struggles

BowFlex isn’t the only at-home fitness supplier struggling out of the pandemic gates. Peloton has repeatedly seen share prices drop, including a 23% dip last month after lowering its full-year 2024 revenue forecast.

Still, the writing has been on the wall for BowFlex for some time now. In December, the company received a notice from the New York Stock Exchange (NYSE) alerting them of their failure to comply with listing standards, such as maintaining an average global market capitalization of at least $50 million over a 30-day consecutive trading period. 

A few months before that, the Vancouver, Washington-based company was hit with a non-compliance notice, which flagged the brand for having an average closing price of less than $1.00 per share over a consecutive 30-trading day period. Now, BowFlex will enter bankruptcy with $140 million in assets and $126 million in liabilities according to its newly filed petition. 

What’s Next for BowFlex?

Along with Matrix Fitness, Johnson Health Tech also carries wellness companies Horizon Fitness and Vision Fitness. Whether Johnson or another bidder ends up acquiring BowFlex, the move promises to give the once-popular at-home fitness maker a much-needed sense of redirection after recent struggles. 

BowFlex notably underwent a rebrand last year, changing its name from Nautilus to BowFlex to put more emphasis on its strongest brand. The equipment maker also remodeled its BowFlex line, equipping it with brighter visuals, messaging with goal promotions and a more inclusive approach to fitness to hopefully attract younger fitness consumers.

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BowFlex is casting “substantial doubt” on its ability to continue operations and is considering filing for bankruptcy, according to a recent quarterly filing. The grim outlook follows a company-wide rebrand last fall that saw Nautilus switch its corporate name BowFlex.

In an SEC filing on February 21, the Vancouver, Washington-based fitness equipment maker cites a challenging retail operating environment, “deteriorating macroeconomic conditions” and a decline in customer demand, resulting in a “significant year-over-year decline” in revenue for the three and nine months ended December 31, 2023. 

BowFlex said it believes “conditions will not improve in the next several quarters,” negatively affecting its liquidity projections. The equipment maker painted a dire picture:

“We have been actively pursuing alternatives to access liquidity or sell the Company or its assets, which may include making a voluntary filing under federal bankruptcy laws,” BowFlex reported. “If we are not able to promptly consummate a transaction or access additional sources of liquidity, we will not be able to maintain compliance with debt covenants in our credit facilities and may not be able to continue to operate our business.”

“Management has determined that under these circumstances, there is substantial doubt about our ability to continue as a going concern for twelve months from the issuance date of this report,” the company added.

BowFlex reports that for the three and nine months ended December 31, 2023, it incurred a net loss of $34.3 million and $51.8 million, respectively, and for the three and nine months ended December 31, 2022, it incurred a net loss of $11.1 million and $84.5 million, respectively. 

Despite its rebrand, which included a colorful marketing campaign and the release of new home-fitness products, BowFlex has continued to struggle. 

The fitness equipment maker received its second notice from the New York Stock Exchange at the close of last year, warning that it wasn’t in compliance with continued listing standards amid its financial issues.

Despite rallying around its “North Star” strategy since 2021 under CEO Jim Barr, the company previously discussed a potential sale and also conducted layoffs, affecting 15% of its staff, in early 2023.

The equipment maker had announced in May that it would sell $13 million in non-core assets, including the Nautilus brand trademark, to boost its balance sheet in response to lackluster net sales. In June, BowFlex, then operating as Nautilus, sold over four million shares of its common stock or equivalents to an institutional investor to raise $5 million for general corporate purposes. 

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In the first full year of post-pandemic life, the fitness and wellness industry has seen its fair share of headlines, both positive and negative. 

While dealmaking has cooled off some from its pandemic-era high, there still were plenty of major fitness and wellness moves in 2023, including brand partnerships, nine-figure funding rounds and celebrity endorsement deals. 

Athletech News recaps the eight fitness and wellness moves that defined 2023, and forecasts what each could mean as we enter a new year.

• 

  1. Peloton, Lululemon Strike Content & Apparel Partnership 

  Two of the biggest brands in the fitness and activewear categories joined forces in a major way in 2023. As part of a five-year global partnership, Peloton agreed to create exclusive digital fitness content for Lululemon Studio, while Lululemon became Peloton’s official apparel partner, creating co-branded clothing for instructors and fans. 

  Why It Matters:

  The deal marked the final nail in the coffin for the Mirror, Lululemon’s ill-fated piece of connected fitness hardware that never quite lived up to its $500 million price tag. Lululemon announced it would be officially discontinuing Mirror, instead pivoting fully to Lululemon Studio, its digital fitness platform which now gives members access to Peloton’s library of workout classes. 

  For Peloton, the deal shows the connected fitness company’s commitment to becoming more than just a “bike company,” as it looks to offer different types of fitness content, from yoga to strength training, in addition to spin classes. 

  What To Watch in 2024:

  While Peloton has built a large following of dedicated fitness fans, the jury is still out on whether the company can successfully transition from being a cycling-focused brand to a one-stop shop for diverse fitness content. Providing content for Lululemon Studio will expose Peloton’s workouts to even more people around the world, potentially helping the connected fitness company make good on its bold expansion plans.

• 

  2. WeightWatchers, Life Time & Xponential Make GLP-1 Moves

  For better or worse, the weight-loss-drug era is officially here. GLP-1s like Ozempic and Wegovy are flying off the proverbial shelves as consumers seek access to the drugs, which have been celebrated for their proven ability to help people lose significant amounts of weight in a relatively short period of time. 

  WeightWatchers acquired telehealth brand Sequence in early 2023, a move that signaled the weight loss company’s shift from a food-based approach to adopting prescription drugs including GLP-1s. WeightWatchers still offers its famous Points Program, but the company has made weight loss meds a core part of its offering. 

  In the fitness realm, brands including Life Time and Xponential Fitness are embracing weight-loss drugs. In November, Life Time launched its first Miora Longevity and Performance clinic, offering members access to GLP-1s such as Ozempic under medical supervision, in addition to a host of other wellness benefits. 

  Xponential, meanwhile, announced its intention to acquire Lindora, a metabolic health brand with clinics offering weight-loss medications. Xponential plans to rapidly scale the brand through franchising. 

  Why It Matters:

  The deals struck by WeightWatchers, Life Time and Xponential show that at least some established fitness and wellness brands are willing to embrace GLP-1s, making weight loss meds an important part of their business strategy. 

  What To Watch in 2024:

  There’s still much to learn about the long-term effects of GLP-1s on sustained weight loss and other aspects of health. Some analysts predict that the rise of weight-loss drugs will lead to a corresponding rise in gym membership sales as more consumers become confident enough in their bodies to want to hit the gym; others have expressed skepticism about the drugs’ ability to spur meaningful changes in people’s fitness and wellness habits.

• 

  3. Apple Partners With Anytime Fitness

  Apple has been pushing further into fitness and wellness for several years now, with advancements in Apple Health and the launch of Apple Fitness+. In November, the tech giant inked its first deal with a gym brand, partnering with Minnesota-based Anytime Fitness. Through the collaboration, Anytime Fitness members across the U.S. and Canada will have access to an Apple Fitness+ subscription included in their membership at no extra cost. The two companies could take their partnership even further with more collaborations down the road, Anytime Fitness CEO Chuck Runyon has told Athletech News. 

  Why It Matters:

  The deal marks Apple’s firm entry into the brick-and-mortar gym space, potentially signaling a major shift in how the company will approach fitness and wellness in 2024 and beyond.  

  What To Watch in 2024:

  It will be interesting to see if Apple partners with any other gym brands, or if the tech giant is content to ride with Anytime Fitness and its network of 5,200 locations worldwide for the time being. For Anytime Fitness, can a partnership with Apple sway consumers to choose AF over rival low-price, high-value gym chains like Planet Fitness, Crunch Fitness and others?

• 

  4. Pvolve Inks Deal With Jennifer Aniston

  Functional Fitness brand Pvolve reached a new level of mainstream recognition and notoriety this year, partnering with celebrity A-lister Jennifer Aniston. The former “Friends” star will advise on Pvolve’s marketing, product and programming strategies, as well as star in Pvolve commercials, including a strength-focused ad campaign that launched in August.

  Why It Matters:

  While celebrity endorsements are nothing new for the fitness industry, getting a star on the level of Jennifer Aniston is uncommon, and it bodes well for Pvolve as the brand expands its footprint of brick-and-mortar studios through franchising. 

  What To Watch in 2024:

  So far, the partnership seems to be bearing fruit for Pvolve: the fitness brand reported a 650% increase in branded search and a 125% increase in franchise inquiries since partnering with Aniston. As time passes, we’ll see how much Pvolve leans on its celebrity affiliation as the brand continues to grow nationwide and even internationally.

• 

  5. Nike Launches Group Fitness Studios, Equipment Line

  Nike is no longer just a fitness apparel brand. In 2023, the Swoosh entered the brick-and-mortar space, opening group fitness studios in Southern California, with another location planned for Austin, Texas. In partnership with FitLab, Nike Studios offers functional training and endurance workouts led by expert instructors. The sportswear giant also pushed into the fitness equipment space, launching Nike Strength, a collection of strength training equipment including barbells, bumper plates, dumbbells and kettlebells, all of which feature prominent Nike branding. 

  Why It Matters:

  As seen with Apple, “blue chip” companies are increasingly entering the traditional fitness space. Nike clearly believes in the long-term potential of the fitness and wellness market, announcing it would hire over 1,000 global fitness trainers to lend expertise in creating holistic fitness content, programming and experiences, presumably as part of its Nike Studios endeavor. 

  What To Watch in 2024:

  Nike could make significant inroads into the fitness and wellness space if the brand is truly committed to the vertical, although it remains to be seen whether consumers will latch onto the idea of visiting a Nike Studio for their daily workout. On the equipment front, could Nike become a true rival to established strength training brands like Eleiko and Rogue Fitness?

• 

  6. Peloton Announces Rebrand, New Strategic Vision

  Back in May, Peloton announced its intentions to become the fitness company for “anyone, anywhere,” looking to shed its perception as a “bike company” focused predominantly on wealthy consumers. 

  As part of a large-scale rebrand, Peloton launched a new fitness app with three subscription tiers, including a freemium option that offers more than 50 classes curated across 12 modalities for no cost. The Peloton App One and Peloton App+ tiers cost $12.99 per month and $24 per month, respectively. The connected fitness company also launched Peloton Gym, which offers at-home strength training workouts. 

  Why It Matters:

  Peloton CEO Barry McCarthy has said that the company wants to branch out beyond cycling workouts, becoming a more well-rounded digital fitness company that makes most of its money through content rather than hardware sales. As a result, Peloton has forged partnerships with top sports teams and leagues, universities and even hotel groups as the brand looks to increase its global recognition and drive users to its app. 

  What To Watch in 2024:

  So far, Peloton has struggled to translate its rebrand into financial success. In its most recent earnings report, Peloton lost paid subscribers, with the connected fitness company struggling to convert free app users into paying members. Peloton has one of the most loyal fanbases of any fitness company, although many of those fans are cycling diehards. It remains to be seen whether Peloton can bring new members into the fold by emphasizing other types of fitness content.

• 

  7. EGYM Raises $225M, Preps for IPO

  In July, fit tech company EGYM received €207 million ($225 million) in growth capital, closing a financing round led by Affinity Partners, a global investment firm launched by Jared Kushner, the son-in-law and former advisor to President Donald Trump. The funding will enable the Munich-based EGYM to prepare for an IPO, the company’s co-founder and CEO Philipp Roesch-Schlanderer has said.

  EGYM provides smart gym solutions, including software and fitness equipment, for more than 15,000 gyms worldwide, and is rapidly expanding its North American team. 

  With the investment, EGYM will also focus on further developing its digital solutions for health-focused workouts and expanding the EGYM Wellpass corporate health network, an area Roesch-Schlanderer has identified as critical. 

  Why It Matters:

  Funding has been harder to come by in 2023 due to macroeconomic conditions, but Affinity Partners’ investment in EGYM shows the promise of tech-enabled fitness. With even more resources, EGYM looks poised to extend its lead as the dominant fit tech provider on the market, potentially reaching even more gyms worldwide.

  What To Watch in 2024:

  Will EGYM’s impressive funding haul be a sign of things to come for fit tech companies or was the round more of an anomaly given the current economic outlook? The latter outcome is possible, as EGYM seems unique in its ability to offer software and hardware solutions under one brand. 

• 

  8. BowFlex, BODi Change Names To Spark Turnaround

  2023 saw a pair of down-on-their-luck fitness brands change their names in hopes of sparking a turnaround. In March, The Beachbody Company announced it would be known as BODi moving forward, a move co-founder and CEO Carl Daikeler said aligned with a shift in the company’s strategy toward inclusive fitness and wellness and away from the looks-based marketing that made the brand famous but has seemed to turn off modern consumers, especially Gen Z. 

  In the fall, Vancouver, Washington-based fitness equipment maker Nautilus changed its corporate name to BowFlex, rallying behind its most popular brand. As part of the rebrand, BowFlex introduced a new color scheme, marketing campaign and at-home equipment designed to target consumers in the connected fitness era. 

  Why It Matters:

  Two of the biggest fitness brands of the 2000s era have struggled in recent years, but they’re not going down without a fight. For both companies, the name change has been accompanied by a major rebranding effort that could fundamentally change the way each positions itself in the fitness and wellness industry. 

  What To Watch in 2024:

  Will the name-change tactic employed by BowFlex and BODi give other struggling fitness companies a blueprint to follow to regain relevance, or will it prove to be a cautionary tale for fitness and wellness brands looking to return to their glory days?

The post The Fitness & Wellness Moves That Defined 2023 appeared first on Athletech News.

BowFlex, the Washington-based fitness equipment maker formerly known as Nautilus, has received notice from the New York Stock Exchange (NYSE) warning the company that it isn’t in compliance with continued listing standards, which requires it to maintain an average global market capitalization of at least $50 million over a 30-day consecutive trading period and a total stockholders’ equity equal to or greater than $50 million.

The struggling fitness equipment company was also hit with a non-compliance notice in September, which targeted the brand for having an average closing price of less than $1.00 per share over a consecutive 30-trading day period.

The fitness equipment maker received the most recent notice on November 27, and plans to notify the NYSE of its receipt by Dec. 11, 2023. The company says it will provide the NYSE with a plan to cure the current deficiency. If BowFlex isn’t able to cure the deficiency, it risks having its stock delisted.

The notice doesn’t affect BowFlex’s operations or its reporting obligations with the SEC, and the NYSE will provide a 45-day period for BowFlex to submit a plan of action it has taken (or will take) to bring it into compliance within 18 months.

The NYSE notice follows a rather grim financial report that BowFlex issued last month, where the equipment maker lowered its revenue forecast, expecting full-year net revenue to be in the range of $215 million to $240 million, compared to previous guidance of a range of $270 million to $300 million. BowFlex execs indicated that retailers are taking a conservative approach to reorders.

From Nautilus to BowFlex

In October, the equipment maker underwent a total company rebrand that transitioned it from the Nautilus name to BowFlex, leaning into its strongest at-home fitness brand and ushering in a more colorful and youthful marketing vibe. Last month, the rebrand was reflected on the stock exchange, with the company’s ticker changing from NLS to BFX.

BowFlex has had an uphill battle in a post-pandemic environment that saw consumers flock to the gym and in-person boutique fitness studios. The equipment maker recently sold $13 million in non-core assets to strengthen its balance sheet, conducted layoffs this year and announced plans to raise $5 million for general corporate purposes to boost its cash balance.

Despite ongoing challenges, the company made good on its promise to add new equipment offerings to its product lineup, introducing the BowFlex Max Trainer SE and the BowFlex IC Bike SE, two new cardio machines with at-home fitness-friendly “nearly silent” hardware that doesn’t disturb other household members. 

“Home fitness is here to stay, and there’s no reason to relegate it to the basement or limit when you can exercise,” said Jim Barr, BowFlex CEO, of the company’s mission to create at-home fitness products with form and function in mind.

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Washington-based fitness equipment maker BowFlex, formerly known as Nautilus, has reported its unaudited Q2 2024 earnings, painting a rather grim picture and lowered full-year fiscal 2024 guidance. The fitness maker now expects full-year net revenue to be in the range of $215 million to $240 million, compared to previous guidance of a range of $270 million to $300 million.

For the fiscal 2024 second quarter ended September 30, 2023,  BowFlex reported net sales of $48.7 million, compared to $65.5 million in the same period last year, a decline of 25.7%. BowFlex says the drop was driven primarily by lowered consumer demand.

“The retail environment has remained challenging throughout our fiscal year second quarter,” said Jim Barr, BowFlex CEO. “We continued to offset the topline softness with diligent cost management and operational excellence efforts, resulting in another quarter of year-over-year improvement in gross margin and adjusted EBITDA loss during Q2.”

The recent total company rebrand from Nautilus to BowFlex was in recognition of the equipment maker’s strongest brand and was reflected on the NYSE, with the company’s ticker changing from NLS to BFX as of November 1.

“While both our retail and direct segment net sales declined year-over-year, we were encouraged by the growth of our international retail business and the positive comp we delivered in our direct strength equipment, a testament to the deliberate product enhancements we’ve made in this area,” Barr said.

Direct segment sales were $20.7 million, compared to $24.5 million, a decline of 15.3% versus the same period in 2022 — a decrease BowFlex says was primarily driven by lowered consumer demand. Cardio sales also declined 29.9% versus the same period in 2022, whereas strength product sales increased 14.9% versus the same period last year.

As for retail, net segment sales were $27.8 million, compared to $39.9 million, a decline of 30.4% for the same period in 2022. Cardio sales declined 24.4% versus last year, and strength product sales declined by 33.8% when compared to last year.

Barr warned that coming into the fiscal third quarter, BowFlex sees the “difficult macroeconomic landscape persisting” as retailers maintain a “highly conservative approach” to inventory reorders. 

“In this environment, we are delivering on our operational excellence initiatives, successfully controlling our costs and optimizing our inventory position,” Barr added. “These initiatives resulted in improvements to adjusted EBITDA loss in the first half of the year and we believe will drive continued adjusted EBITDA loss improvement in the second half of the year. 

One encouraging area was BowFlex’s digital fitness platform JRNY, where members reached 596,000, an approximate 51% growth compared to the same quarter last year. Of the members, 143,000 were subscribers, representing approximately a 1% increase over the same period last year. BowFlex now expects to cross 650,000 members by March 31, 2024, compared to previous guidance of targeting 625,000 members.

Of the new corporate identity, Barr had previously noted it represents the brand’s “unique position in connected at-home fitness equipment.”

It’s an area he’s still hopeful that BowFlex can capitalize on.

“Looking further ahead, we are strategically positioned to capitalize on the long-term shift to connected at-home fitness with a strong pipeline of new strength and cardio products and continued momentum on scaling JRNY,” Barr said.

The post BowFlex Lowers Revenue Forecast Amid Retail Challenges appeared first on Athletech News.

With the holidays right around the corner and ahead of a major rebrand that will transition the Nautilus name to BowFlex on November 1, the fitness maker has unveiled two new cardio machines for fitness enthusiasts of all levels: the BowFlex Max Trainer SE and the BowFlex IC Bike SE.

The latest fitness equipment from the Vancouver, Washington-based brand boasts “nearly silent,” hardware, enabling customers to exercise late at night or early in the morning without disturbing others. While a desirable fitness equipment feature, the new machines’ lower-than-normal sound profile emphasizes BowFlex’s commitment to delivering a top-notch at-home training experience.

“Home fitness is here to stay, and there’s no reason to relegate it to the basement or limit when you can exercise,” said Jim Barr, BowFlex CEO.

Barr commented the new fitness product lineup is designed with both form and function in mind. 

“Being a consumer-focused company is more than just a philosophy; it’s a core part of our mission, reflected in the features present in our products, and the connected, personalized experience we offer through JRNY – our digital fitness platform,” Barr said. Both fitness machines will include a two-month, free trial of the JRNY membership.

Gregg Wilson, senior cardio product manager, said that both new products were designed with BowFlex consumers in mind and that the brand looked for ways to integrate customer feedback into the hardware design.

“We want to support a range of customers, so we made the BowFlex IC Bike SE even more adjustable,” Wilson said. “We heard that people find fans are a little noisy, so we took that off the BowFlex Max Trainer SE. Our decisions were aimed at supporting our customers and what moves them – whether they are focused on building their physical or mental health.”

BowFlex Max Trainer SE

The new BowFlex Max Trainer SE, a “stair stepper meets elliptical,” offers a low-impact, high-intensity workout with a minimalist aesthetic. A 7-inch color display keeps track of heart and burn rates, with a device holder for a phone or tablet. Users have sixteen resistance levels to choose from, varying in intensity, with Terrain Control Technology providing the real-life sensation of climbing hills and valleys in JRNY Explore the World routes. 

BowFlex IC Bike SE

BowFlex IC Bike SE provides an indoor cycling experience with numerous ways to adjust the handlebars and seat, maximizing comfortability. The bike offers 100 magnetic resistance levels, a set of 3-pound dumbbells, an expandable water bottle holder and a padded media holder. A 7-inch display tracks distance, speed, heart rate and more. Like the new BowFlex Max Trainer SE, riders can follow workouts on their phone or tablet while connected to JRNY or other apps. 

The Max Trainer and IC Bike are now available for pre-order and retail for $1,499 and $1,099, respectively.

Last month, the equipment maker also introduced the Schwinn 490 Elliptical, a connected fitness machine that syncs to its JRNY app, offering routes, trainer-led classes and personalized workouts.

BowFlex’s New Chapter

Like other companies in the at-home fitness arena, Nautilus has struggled in recent years, even receiving a non-compliance notice from the New York Stock Exchange for failing to meet its required price criteria.

The company had launched a self-described “North Star Strategy” in 2021. Since then, Nautilus has initiated a $13 million sale of its non-core assets, conducted layoffs and made plans to raise $5 million through a definitive securities purchase agreement with an institutional investor to sell over four million shares of its common stock or equivalents. 

Nautilus had teased upcoming fitness products as it revealed a complete brand overhaul for its popular BowFlex line, aiming to target younger demographics with its vibrant color palette and inclusivity push. One of its first promos highlighted its new tagline, “Move to What Matters to You,” — a refreshed identity that the company said embraces the idea that “your best self isn’t ‘out there’ in a different shape or size, or in the form of someone else’s expectations – it’s already inside you.”

With just a few days left before its official name change, the at-home fitness maker is hopeful that leaning into the strength of the BowFlex name will put it on the fast track to normalization and, more importantly, greener pastures. 

Its new corporate identity as BowFlex will better represent its position in the connected at-home fitness sector, Barr has said. The CEO also stated that while the company is on the path to profitability, there’s “still a long way to go in fiscal ’24.” 

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Following news of a total company rebrand and the $13 million sale of its non-core assets, including the Nautilus brand trademark, Washington-based Nautilus has announced it will change its corporate name to BowFlex Inc. in honor of its strongest brand. 

The name change will take effect on November 1, which includes an NYSE ticker change from NLS to BFX.

“Our new corporate identity better represents our unique position in connected at-home fitness equipment and reinforces our focus to help people build inner and outer strength,” said Nautilus CEO Jim Barr.

Barr had teased that the fitness maker would change its name during a recent earnings call, where he stated the company is on track to return to profitability but acknowledged there’s “still a long way to go in fiscal ’24.” 

The fitness maker confirms that its current management team will remain in place despite the name change.

Nautilus’ adoption of the BowFlex name may indicate what’s ahead for the look and feel of the fitness maker’s brand. 

The company recently gave its BowFlex line a makeover with updated visuals and an inclusivity vibe to appeal to younger fitness consumers and stand out in what Barr called a “sea of sameness” of the fitness industry.

New Fitness Products on the Horizon 

Over the summer, the fitness maker had promised consumers could expect enhanced fitness offerings under Bowflex for the holiday season, along with a wave of new BowFlex products and features from digital fitness platform JRNY in 2024 across strength and cardio. 

Barr says Nautilus is gearing up for an “exciting fitness season,” with plans to introduce a pipeline of new products for the holidays. He noted that the fitness maker will continue to “capitalize on the enduring shift to home fitness.” 

Last month, the equipment maker unveiled the Schwinn 490 Elliptical, a connected fitness machine that syncs to its JRNY app, offering routes, trainer-led classes and personalized workouts. Based on its findings, the new elliptical represents the company’s long-term confidence in at-home and connected fitness.

“Our research shows most people who exercise do so at home, and home workouts are here to stay,” Barr said of the Schwinn 490 Elliptical. “Now that they are comfortable and confident in their home workouts, they’re ready to expand their healthy routines.”

The ‘North Star’ Strategy

Like many at-home fitness companies, Nautilus has faced post-pandemic challenges as consumer behavior normalized and either adopted a hybrid fitness approach or fully returned to in-person fitness. To overcome its difficulties, the fitness maker launched a “North Star” Strategy in 2021.

In addition to selling $13 million in non-core assets to strengthen its balance sheet after a steep decline in net sales, Nautilus laid off 15% of its employees earlier this year to cut costs.

This summer, the company announced plans to raise $5 million for general corporate purposes to boost its cash balance, entering a definitive securities purchase agreement with an institutional investor to sell over four million shares of its common stock or equivalents. 

More recently, the fitness maker was hit with a non-compliance notice from the New York Stock Exchange for failing to meet its required price criteria, as the average closing price of its common stock has been less than $1.00 per share over a consecutive 30-trading day period.

The post Nautilus Changes Corporate Name to BowFlex in Turnaround Bid appeared first on Athletech News.

Nautilus, Inc., the parent company of BowFlex, has received a non-compliance notice from the New York Stock Exchange. The fitness equipment maker isn’t meeting its price criteria, as the average closing price of its common stock has been less than $1.00 per share over a consecutive 30-trading day period.

While the NYSE-issued notice doesn’t result in the immediate delisting of the stock, Nautilus confirmed it will respond within ten business days of its intent to cure the deficiency. According to NYSE rules, the fitness maker has a six-month period following the notice to regain compliance.

Facing difficulties post-pandemic, Nautilus started employing what it calls a “North Star” strategy in 2021 to correct course.

The Vancouver-based fitness maker laid off 15% of its workforce as a cost-savings measure earlier this year and announced it would sell $13 million in non-core assets, including its name trademark, to boost its balance sheet after a steep decline in net sales. Other plans included raising approximately $5 million for general corporate purposes through a direct public offering and warrants. 

Nautilus raised eyebrows this summer with plans for a “total company rebrand,” a decision that CEO Jim Barr, told investors would solidify its position in the connected fitness industry. He indicated that the upcoming revamp may include a company name change by the end of the year. 

“We haven’t announced the new name yet, we kind of want you to be on the edge of your seats,” Barr said.

Nautilus also gave its BowFlex line an overhaul to attract younger fitness consumers.  

The company recently posted its fiscal Q1 2024 results, reporting net sales of $41.8 million, down 23.8% when compared to last year ($54.8 million), although gross profit increased 24.3% to $8.6 million when compared to $7.0 million last year.

“We are pleased with our performance to start the year, but recognize that there’s still a long way to go in fiscal ’24,” Barr told investors.

The company recently released the Schwinn 490 Elliptical, a connected fitness machine that Nautilus said was in response to customer feedback.

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Nautilus Inc. is working on a “total company rebrand” that will solidify its position in the connected fitness industry, its CEO Jim Barr said during an earnings call, seeming to reveal that the company would be changing its name.

The Vancouver-based fitness maker announced its fiscal first quarter 2024 results, reporting net sales of $41.8 million, down 23.8% when compared to last year ($54.8 million), although gross profit increased 24.3% to $8.6 million when compared to $7.0 million last year.

On Thursday’s earnings call with investors, Barr emphasized that Q1’s results demonstrate the company’s progress to return to profitability. Earlier this year, Nautilus laid off 15% of its workforce as a cost-savings measure.

“We are pleased with our performance to start the year, but recognize that there’s still a long way to go in fiscal ’24,” Barr said.

From BowFlex Makeover to a Total Rebrand

Nautilus recently unveiled a rebrand of its BowFlex line, including updated visuals, and inclusivity, designed to appeal to younger fitness enthusiasts. 

“The fitness industry is a sea of sameness, and the new Bowflex brand is designed to stand apart,” Barr said of the brand revamp.

In addition to the refresh, there will be an entire company rebrand coming soon, one designed to reinforce Nautilus’ identity as a leader in the connected home fitness industry.

“The recent sale of the Nautilus brand has further strengthened our strategic direction,” Barr said “As a result, we are currently in the process of executing a total company rebrand by the end of the calendar year.”

Barr seemed to tell investors that Nautilus would be changing its name as part of the rebrand.

“We haven’t announced the new name yet, we kind of want you to be on the edge of your seats,” he said. “We’ll announce that a bit later and plan to complete it by the end of the calendar year.”

In May, Nautilus announced it was selling $13 million in non-core assets, including the Nautilus brand trademark assets and related licenses, in an effort to boost its balance sheet.

Upcoming Fitness Products

Looking ahead, consumers can expect a “robust first wave” of updated connected fitness equipment this fall, all featuring updated visual branding.

As the holiday fitness season approaches, Nautilus confirms it will enhance its fitness offerings under Bowflex.

“We plan to follow up this wave of exciting new Bowflex products and JRNY features in calendar 2024, in both strength and cardio portfolios,” Barr said.

Retail Challenges

While Nautilus relies on the retail sector as part of its omnichannel approach, it acknowledges the retail environment remains uncertain.

Still, Barr reported that consumer interest in at-home fitness is “encouraging,” with solid demand. Nautilus reported direct sales of $22 million, while financial results in Nautilus’ retail segment aligned with the company’s expectations.

Digital Shows Promise

While Nautilus remains focused on its path to profitability, scaling is also vital to the company. Barr reports that its efforts have been “fruitful” so far, with over 535,000 members on Nautilus’ JRNY digital fitness platform at the end of Q1, a 48% year-over-year growth. 

The digital fitness platform offers an adaptive fitness membership. The company introduced the JRNY app with motion tracking earlier this year, with personalized coaching and feedback, automatic rep tracking, form guidance and adaptive weight targets.

“Among these members 150,000 are subscribers, showcasing 17% year-over-year growth,” Barr shared, adding that Nautilus has also rightsized its inventory and reduced lead times.

Cost–Saving Measures 

The moves Nautilus made to strengthen its balance sheet have paid off, with Barr telling investors the company has improved liquidity and financial flexibility to weather the macroeconomic environment. The company reported operating expenses of $19.2 million compared to $58.1 million last year, due in part to the sale of its non-core assets.

“Additionally, in June, we made a public offering of common stock to raise additional cash for the balance sheet, as well as provide additional flexibility to opportunistically invest in marketing and drive sales growth,” Barr said. “This places us in a better position as we prepare for our product launches in the upcoming fitness season.”

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Nautilus has given a complete makeover to its BowFlex brand, revealing an energized look coupled with a new philosophy based on inclusivity and empowerment. BowFlex indicates that the new brand identity will inform the design and function of upcoming products later in the year.

BowFlex gave a preview of its new image on social media, with a promo clip that demonstrates inclusivity as opposed to shredded abs and a new tagline, “Move to What Matters to You.” BowFlex developed its new ethos in partnership with Collins, a business design service. 

“A new BowFlex has arrived,” Nautilus posted on LinkedIn. “A new identity that embraces the idea that your best self isn’t ‘out there’ in a different shape or size, or in the form of someone else’s expectations – it’s already inside you.”

BowFlex says its updated visual system and brand philosophy help convey its new and empowering message to fitness enthusiasts.

With splashes of color and messaging that promotes individual goals, BowFlex’s updated approach is appealing to younger consumers, more interested in becoming active and healthy than the fitness goals of yesteryear. 

“The fitness industry tends to be a sea of sameness, but with our rebranding we are proud to deliver something different: a brand that embraces the individuality of our customers,” said Becky Alseth, chief marketing officer at Nautilus. “Success in fitness doesn’t have to be tied to counting calories, getting shredded, or changing the number on the scale. It’s about getting moving and showing up for a workout, even a short one, and that’s the new BowFlex.”

The equipment maker says the capitalization of the ‘F’ in BowFlex’s new logo signals its revamping and modern approach to redefining strength.

Forging a New Identity

Michael Robinson, creative director at Nautilus, told Athletech News that the rebrand was designed to better align BowFlex with the current values of its customers.

“Historically, there’s been a perception of the BowFlex brand that associates it with quick results,” Robinson said. “We learned our consumers now prioritize movement because of how it makes them feel.”

“We saw this as our opportunity for the brand to reflect their attitude that fitness is a lifelong journey not driven purely by aesthetic outcomes,” he added. “The new BowFlex brand’s expressive color and movement-oriented photography showcases the range of emotions you experience during a workout.”

Robinson said the new BowFlex brand identity will be incorporated into “new products launching this holiday season and beyond.”

“You can expect intuitive functionality and design that’s clean, contemporary and looks great in any living space,” he said.

Nautilus CEO Jim Barr has said he recognizes that the way consumers think about fitness has “radically changed” and that Nautilus is intent on delivering products that meet fitness enthusiasts not just where they are today, but throughout their journey. In an interview with Athletech News last year, Barr shared that Nautilus was focused on the internal motivations of fitness consumers.

“From our wildly popular SelectTech strength product line to the unique features of our VeloCore bike and our AI-driven, adaptive fitness platform JRNY, we are redefining what a personalized, connected fitness experience really is –– with a new BowFlex brand identity to match,” Barr said of the rebrand.

Nautilus Looks To Turn Things Around

Nautilus has faced challenges in a post-pandemic environment, employing a “North Star” strategy in 2021 to correct its course. The fitness maker had discussed a potential sale last fall, with its board of directors hiring Evercore as a financial advisor, and announced layoffs at the beginning of the year, affecting 15% of its staff as a cost-savings measure after missing Wall Street expectations.

More recently, the equipment maker announced it would sell $13 million in non-core assets, including the Nautilus brand trademark, to boost its balance sheet after reporting a drop in net sales. Last month, Nautilus said it would sell over four million shares of its common stock or equivalents to an institutional investor to raise $5 million for general corporate purposes. 

The fitness equipment maker will announce its financial results for the fiscal first quarter that ended June 20, 2023, on Aug. 9.

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Fitscope is on a mission to be at the forefront of the fitness industry’s digital content revolution. If the brand has its way, people will be streaming Fitscope classes on cardio machines everywhere, from their local big-box gym to their basement. 

Over the last three years, Fitscope has enjoyed rapid growth in the at-home fitness market. Now the brand is looking to leverage its success with on-demand studio classes on the commercial side.

Fitscope Commercial is a subscription offering geared for gyms, hotels and other workout facilities that want an economical option to provide group fitness classes. At $50 per month per location, gyms can stream on-demand cardio classes to computer-connected monitors and TVs in group fitness rooms. The complete Fitscope library of over 1,200 classes will be available, covering every major cardio machine, including cycles, treadmills, ellipticals and rowers. 

Additionally, the Fitscope app can be downloaded onto equipment with Android-based consoles. Fitscope is working with OEMs to pre-install the Fitscope app on connected cardio equipment to make it easy for gyms to set up the service and make it available for their members.

Fitscope recently announced its first OEM deal with Bodycraft, which has started shipping equipment with Bodycraft’s new Connect-22 monitor pre-installed with Fitscope. The monitor can be ordered on bikes, treadmills, ellipticals and rowers. Fitscope’s growing library of over 1,200 classes has studio workouts for all those machines and more.

“This opens up new scheduling options for gyms,” said Ed Stansfield, founder of Fitscope. “Since pricing is fixed, group on-demand classes can be scheduled at hours that don’t necessarily make sense for live instruction. Or it can be used to replace live instruction altogether for significant cost savings.”

Disrupting the Fitness Content Space

Stansfield got the idea to create Fitscope when he experienced the limitations of accessing Peloton workouts while living in Hong Kong. Since the connected fitness company’s bikes weren’t available for purchase in the East Asian country at the time, Stansfield was forced to use a generic spin bike and follow along as best he could using the Peloton app.

“I realized the value proposition that was interesting about Peloton wasn’t so much the equipment, it was the app,” he recalls.

Unlike other fitness content providers that focus on specific workout types, Fitscope sets itself apart by offering content for many types of cardio machines. 

Fitscope’s online content library has grown to feature over 1,200 on-demand classes, each led by expert instructors and catering to various fitness levels and preferences. On the Fitscope app, you can find a class for pretty much any type of cardio machine, from the treadmill to more specialized devices like vertical climbers and functional trainers. 

Stansfield believes a big part of what sets Fitscope apart from the litany of other fitness content providers is the scope and depth of its offerings. 

“There are a lot of companies out there doing spin classes or rowing classes, but that’s just the tip of the iceberg for us,” he says. “We have categories built across all types of very niche-focused machines.”

The company also produces content for non-machine categories like yoga, stretching, strength training and core work, although its bread and butter is cardio equipment. 

Fitscope currently has around 30 instructors, each of whom brings diverse and high-level fitness experience to the platform. Being situated in Los Angeles, a city with a thriving and eclectic boutique fitness scene, gives Fitscope a unique level of access to talented teachers. 

The Fitscope team travels to studios across LA to take classes and hand-selects the instructors that are popular with audiences.

“We find somebody who is really popular, we do their class and then we talk to them about joining Fitscope,” Stansfield says. “So when we make an elliptical class or a vertical climber class, for example, the trainers we’ve recruited have already been doing those classes in a studio in LA. They’re already experienced on what people like, how far to push people and how to motivate people.”

A Unique App

Aside from its deep content catalog and high-quality instructors, a key aspect of Fitscope’s value proposition lies in its mobile app, which syncs to cardio equipment and heart-rate monitors using Bluetooth FTMS, the industry standard for connected fitness equipment. Users exercising on FTMS-equipped machines can see real-time data displayed on their phones or tablets while taking a class on the Fitscope app.

“If you’re doing a cycling class, you can see all the metrics from your console on the screen, like RPMs and watts,” Stansfield explains. “For a treadmill, you can see your miles per hour.”

Fitscope instructors incorporate those metrics into their sessions, giving classes an extra bit of excitement and personalization. For those without access to Bluetooth-enabled equipment, the Fitscope app displays metrics from the instructor’s machine on-screen.

Since manufacturers often send their machines to Fitscope’s studio for content production purposes, the company is uniquely positioned to be able to ensure its app pairs with as many types of cardio equipment as possible. 

“We actually test on equipment from a wide range of brands and then we make tweaks to the FTMS setting to make sure that our app pairs with as many pieces of equipment as it can,” Stansfield says. “Because of that, our app ends up working with a lot more equipment than other apps that are using FTMS.”

Many Options for Consumers & Gyms

In a strategic move to gain market share and expand its reach, Fitscope recently introduced a free subscription tier to its app. With Fitscope Free, users get access to seven classes per category, or 70 classes in total, for no charge. The free classes are updated every month and feature a mix of different program lengths, types and instructors, so users get a complete picture of what Fitscope has to offer. 

“Our biggest issue is getting people to try Fitscope,” Stansfield says of the decision to introduce a free tier. “Once they try it, usually they subscribe and stay subscribed for over a year. All of our retention and conversion metrics are really strong. But marketing is expensive, so we want to get Fitscope out there and make Fitscope ubiquitous across as many devices as possible.”

Fitscope’s paid subscription offers full access to the brand’s vast library of over 1,200 on-demand classes, all for a price as low as $99.99 per year for an individual user, making it a compelling value proposition for fitness enthusiasts.

In addition to its direct-to-consumer endeavors, Fitscope also has a fast-growing B2B business. The brand licenses its classes to platforms like FitnessOnDemand and even creates some white-labeled content for OEMs including Bowflex and Bodycraft. Fitscope classes consistently place in FitnessOnDemand’s monthly Top 10 rankings, so the partnership has served well to increase brand awareness.

Stansfield doesn’t see Fitscope’s different business models as competing with each other. The important thing, he believes, is getting the Fitscope name out there, whether that’s directly to consumers through the company’s app, on cardio machines in gyms, on on-demand platforms, or through white-label partnerships.

“This is the way the television industry has worked for years,” says Stansfield, recalling his former days as a TV executive. “Some of the biggest shows on Netflix have actually been produced at Warner Brothers Studio. Warner Brothers has their own HBO Max app, yet they’re still happy to license some of their content to Netflix and produce content for them. I think that’s how the fitness ecosystem will ultimately evolve.”

The post Fitscope’s Plan To Revolutionize Group Fitness With On-Demand Classes appeared first on Athletech News.

Nautilus has set forth plans to raise approximately $5 million for general corporate purposes through a direct public offering and warrants.

The fitness equipment maker of brands such as Bowflex, Modern Movement, Schwinn Fitness and Universal Gym Equipment has entered into a definitive securities purchase agreement with an institutional investor for the purchase and sale of 4,098,362 shares of its common stock or common stock equivalents.

The agreement outlines a purchase price of $1.22 per share. The closing of the offering is anticipated to occur on or about June 20.

Nautilus will also issue the investor warrants to purchase up to 4,098,362 shares of common stock with an exercise price of $1.35 per share. The fitness equipment maker says the warrants will be exercisable six months following the date of issuance and will have a term of five and one-half years.

Roth Capital Partners is acting as the exclusive placement agent for the offering.

In May, Nautilus announced it would be selling $13 million in non-core assets including its brand trademark after reporting a significant decline in net sales. At the beginning of the year, Nautilus issued pink slips to roughly 15% of its staff as a cost-saving measure.

The fitness manufacturer has been working on its ‘North Star’ strategy, and its CEO, Jim Barr, pointed to the return to pre-pandemic demand as a primary driver of the sales decline.

Nautilus had discussed a potential sale last fall, with its board of directors hiring Evercore as a financial adviser. 

The post Nautilus Plans To Raise $5M in Latest Move To Boost Cash Balance appeared first on Athletech News.

Nautilus is selling $13 million in non-core assets in an effort to boost its balance sheet after the fitness company reported preliminary fourth-quarter and full-year fiscal 2023 results that showed a steep drop in net sales.

The manufacturer of brands such as Bowflex, Modern Movement, Schwinn Fitness and Universal Gym Equipment has been employing its ‘North Star’ strategy, a long-term plan that Nautilus has implemented.

Nautilus CEO Jim Barr indicated that the strategic review is ongoing as the Washington-based fitness company continues to assess any opportunities that may accelerate its transformation.

Earlier this year, the connected fitness equipment manufacturer announced it would reduce its workforce by approximately 15% as a cost-savings measure. 

Nautilus had previously discussed a potential sale last fall, with its board of directors hiring Evercore as a financial advisor. 

Nautilus exceeds expectations, but sales are down

For the fiscal fourth quarter that ended March 31, Nautilus expects to report net sales of $68.4 million compared to $119.7 million last year, based on preliminary, unaudited results announced Tuesday. The fitness company says the sales decline is driven primarily by the return to pre-pandemic demand. 

Nautilus says it focused on significantly reducing its branded inventory in the quarter and that excluding sales of Nautilus-branded equipment, net sales for Q4 2023 are expected to be $62.0 million.

For the twelve months that ended March 31, Nautilus expects to report net sales of $286.8 million (versus guidance of about $270 million) compared to $589.5 million last year. 

As indicated for Q4, Nautilus says the return to pre-pandemic demand again drove the sales decline. Excluding sales of Nautilus-branded equipment, net sales for FY 2023 are expected to be $274.8 million.

As for JRNY, the company’s digital fitness platform, Nautilus reports it has approximately 500,000 members as of March 31, in line with guidance. The JRNY platform and app had undergone a significant overhaul to become a critical maneuver in the company’s connected fitness journey.

“I am proud to announce results that exceeded our expectations,” Barr said of the preliminary results. 

“Continued demand in our direct business during the fourth quarter as well as continued outstanding inventory management and cost-control initiatives, enabled us to deliver solid results for Q4 and fiscal year 2023,” he said. “We are also pleased by the strong momentum of our differentiated digital offering, having achieved our growth targets for JRNY members by the end of the fiscal year.”

In an interview with Athletech News last summer, Barr indicated three trends for the fitness industry: connected fitness is here to stay, fitness has gone hybrid and a more holistic view of fitness and wellness is evolving.

Asset sale

One move to enhance Nautilus’ balance sheet is the sale of non-core assets for approximately $13 million in cash, which the connected fitness company says it has completed. 

The sale includes the Nautilus brand trademark assets and related licenses, which the company says will continue to streamline its focus and provide additional financial flexibility. 

Nautilus used the net proceeds of the sale to pay down a portion of its term loan. 

“The sale of these valuable, but non-core assets, including the Nautilus brand, which has been de-emphasized in our transformative North Star strategy, position us well to continue to capitalize on long-term growth in consumer demand for at-home fitness,” Barr said.

Enhanced credit agreement 

Nautilus has also enhanced the terms of its credit agreement for its existing revolving credit facility. 

Under the new deal, the connected fitness company has reduced the revolver commitment from $100 million to $60 million. Nautilus also confirmed that it has paid down the outstanding amounts on the revolver and there are currently no outstanding borrowings.

“With the improved financial flexibility from the sale and enhancements to our balance sheet, we’re confident in our ability to manage through the current environment and continue our path to becoming a leader in connected fitness,” Barr said.

Nautilus is confident moving forward

While the fitness manufacturer has faced challenges post-pandemic, Barr is still confident about the 35+ year-old company, telling the Portland Business Journal that many of the issues Nautilus is facing are due to short-term headwinds, including supply chain disruptions.

He believes the retail channel will remain a long-term component of the company’s business model as the macro environment stabilizes, explaining that even though many fitness enthusiasts have returned to the gym, Nautilus’ research shows that many still prefer home workouts on Nautilus equipment. 

Based on those findings, Barr revealed that Nautilus is gearing up to release more equipment and programs focused on hyper-personalization.

The target consumer has also shifted. 

“We went after a new consumer for whom exercise is more important. We were over-indexed on a group that we had to get off the couch … and (for whom) exercise was some kind of a chore. And it turned out that was a great target segment to go after,” Barr told the publication in March.

The connected home fitness provider plans to report its results in full on May 23.

Correction: A previous version of this article mistakenly referred to Octane Fitness as a Nautilus-owned brand. TRUE Fitness purchased Octane from Nautilus in 2020.

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Nautilus, a household name in fitness equipment, reported its third-quarter 2023 operating results and announced a 15% reduction in staff as a cost-saving measure.

On an earnings call this week, the Washington-based manufacturer of brands such as Bowflex, Modern Movement, Octane Fitness, Schwinn Fitness, and Universal Gym Equipment discussed its results and plans moving forward.

Times have been challenging for Nautilus, which has been hard at work with its ‘North Star strategy,’ a long-term plan that the fitness maker implemented to double sales by 2026.

To recap, at the close of 2022, Nautilus shared that it was better positioned to navigate short-term macroeconomic challenges after amending its credit facility via a refinance of its previous term loan with a new one.

The fitness maker had also discussed a potential sale last fall, with its Board of Directors hiring Evercore as a financial advisor. 

Despite its recent efforts, Nautilus has missed its Q4 2023 expectations but is confident in its presence as a fitness hardware manufacturer. The fitness maker promises exciting new fitness products this year and says it has a firm grip on what fitness consumers want.

Here are some key highlights from the Nautilus third-quarter 2023 earnings call, which revealed the following results:

• Direct Segment Net Sales of $46.7M up 30% vs pre-pandemic Q3 Fiscal 2020
• JRNY Total Members Reaches Approximately 450k with 88% Growth vs Q3 Fiscal 2022
• Gross Margin Improves 300 Basis Points vs. Q3 Fiscal 2022 and 580 Basis Points vs Q2 Fiscal 2023
• Adjusted EBITDA Loss Reduced by 67% versus Q3 Fiscal 2022
• Executes $30M Cost Reduction Initiatives to Drive Profitable Growth

A digital offering win with JRNY growth 

Nautilus reports continued momentum in its differentiated digital offering, sharing that it added over 50,00 JRNY members in Q3 2023, reaching roughly 450,000 JRNY members, an 88% increase compared to the same period last year.

The JRNY digital fitness platform and app underwent a major overhaul in 2021, which Nautilus executives stated at the time was only the beginning of the company’s vision for connected fitness.

Nautilus is continuing to enhance and scale its digital offering, and recently unveiled JRNY with motion tracking, allowing for personalized coaching, feedback, rep counting, and customized workout recommendations. 

“We continue to target approximately 500,000 members by the end of the fiscal year, which implies approximately 54% year-over-year growth in fiscal 2023,” Nautilus CEO Jim Barr noted. “We are also seeing progress on conversion to paid subscribers, which are growing faster members.”

Retailers are currently hesitant & will continue to be conservative for a bit longer

While Nautilus reports ‘solid demand’ in its direct business and momentum with its connected fitness offering JRNY, the company is navigating persistent retail headwinds. According to Nautilus CEO Jim Barr, retail net sales declined 6% compared to Q3 fiscal 2020.

Barr noted that retailers continue to take a conservative approach in light of economic uncertainty, reporting that Nautilus is seeing lower levels of re-orders, impacting its sales outlook for its retail segment in the fourth quarter. 

He added that Nautilus expects to see the same into the first half of fiscal 2024, adding, “If they’ve been conservative so far, they’ll probably continue to be somewhat conservative and we baked that into our outlook.”

The Nautilus CEO still believes in the retail channel as an important long-term component as the macro environment stabilizes, noting that it holds a ‘strong market share,’ especially after significantly increasing the number of retailers over the last couple of years.

Barr points out that the slowdown is simply a result of the economic environment, reminding investors that retailers haven’t dropped products or categories. “It’s just this conservative nature of reordering that’s been at play here,” he said.

Cost-saving measures & operational efficiencies 

Barr reports that Nautilus has taken additional near-term steps to rightsize its business, emphasizing operational efficiencies. These include enhancements to the Nautilus supply chain, improvements to its inventory management, and optimization of its advertising. 

“As challenges in the retail business persist, we have taken additional proactive steps to reduce our cost by an expected $30 million on an annualized basis,” Barr said.

One method that Nautilus has leveraged is the reduction of its contracted labor, as well as a 15% reduction of its staff. 

“These actions, while difficult, are grounded in our priority to continue to align our cost structure with our revenue expectations and are aimed at driving profitability and improving cash flow,” Barr said of the planned Nautilus layoffs.

Nautilus executives also plan to strengthen its balance sheet and said it is continuing to improve its inventory position, with expectations that levels will decrease further in future quarters.

The North Star strategy continues with ambitions to be a connected fitness leader

Nautilus remains committed to its North Star strategy to address near-term challenges, and Barr believes the fitness maker has set the foundation to becoming a connected fitness leader.

“At our core, we excel at equipment, we continue to see demand for our fast moving top sellers and traction in our direct channel. Our focus remains on providing consumers with a broad variety of superior products at a range of price points,” he said.

Upcoming new fitness products

New fitness products are planned for the year, which Barr said is a strong lineup of updated connected fitness equipment. “It’s important to stress that we make money in the equipment business and this will be key to our path back to profitability,” he noted.

As far as what new products are on the horizon, Barr said they should be expected this year, but is remaining mum for now. 

“We’re not prepared to announce what those are yet for competitive reasons, but we are very, very excited about that,” he said. 

The new equipment offerings will have the company’s new ‘visual brand language,’ with Barr noting that Nautilus has really invested in transforming the Bowflex branding and identity, which he said will come across on the upcoming hardware. 

“We’ve learned a lot in the pandemic about how people are using equipment, which rooms of the house it’s migrated to, how many pieces people are buying,” he said. “All of these things have changed profoundly and so you’ll see our lineup for calendar year 2023 reflecting all of those learnings.”

Barr understands Nautilus customers, revealing that connected fitness is its equipment portfolio, partnered with JRNY, which is what customers want. “That’s what our target wants. And we will continue to deliver both those things,” Barr said. 

Nautilus researched home fitness & says it’s well-positioned to meet consumer needs

According to Nautilus, home fitness isn’t going anywhere, and it’s ready to meet those needs in the long run.

“We have conviction in the long-term opportunity of home fitness,” said Barr, adding that Nautilus research shows the shift to home fitness has remained steady for over two plus. 

“Over 65% of U.S. adults recently surveyed continue to say they work out at home up from 43% who reported the same at the beginning of 2020. In our target segments, this trend is even more pronounced with about 85% working out at home,” Barr said. 

“This is a prevailing shift in trends and Nautilus is well positioned to take advantage of this sustainable increase and demand in our long-term addressable markets,” he added.

Nautilus won’t abandon its equipment hardware for connected fitness

Even though Nautilus is excited for its connected fitness offerings and successes with JRNY, the fitness maker is confident in its hardware. Unlike other fitness companies who have pivoted towards digital offerings, Barr says Nautilus has no plans to drift away from its equipment offerings. 

“We excel in the hardware business,” said Barr. “We know our path back to profitability centers around continuing to be good at creating great hardware and selling it.”

The post Earnings Call Takeaways: Nautilus Plans to Layoff 15% of Staff, Misses Q4 2023 Expectations appeared first on Athletech News.

Nautilus, Inc. has announced that its Board of Directors has launched a comprehensive review of strategic alternatives, which could include the potential sale of the home fitness company. In response, shares of the fitness equipment manufacturer rose over 8% in premarket trading on Tuesday.

According to Anne Saunders, Chairman of the Board, Nautilus is looking for opportunities to accelerate the fitness company’s digital transformation. Last month, Nautilus announced the appointment of Saunders as new board chair.

“We have made tremendous progress executing our North Star strategy and transforming Nautilus from a product-led hardware company to a consumer-led, digitally connected company,” said Saunders in a press release making the announcement. “Given the dynamic market environment and growth of the home fitness sector, as well as the potential we see to accelerate North Star, the Board felt the time was right to review strategic options.” 

The North Star strategy, as noted by Saunders, was a long-term plan that Nautilus implemented with the goal of doubling sales by 2026 as it sought to capitalize on the at-home fitness boom. Nautilus, maker of well-known fitness products like Bowflex and Schwinn, stated at the time that it would rely on brand recognition, a diverse product portfolio, and omnichannel distribution.

Now, Nautilus CEO Jim Barr says that the home fitness company is well-positioned to deliver long-term growth and profitability, and that the company intends to expand JRNY, its digital fitness platform, further. As of June, JRNY had over 360,000 members.

“Regardless of the outcome of this process, the future is bright for Nautilus. Our recent investments have allowed us to reach more of our target customers, grow our member base, add new retailer partners, and expand our supply chain capacity. Given the state of the at-home fitness ecosystem, we believe the timing is right to comprehensively assess any opportunities that may accelerate our transformation and enhance value for our shareholders, while also benefiting our customers, employees, and vendors,” Barr said. 

The Nautilus Board has hired Evercore to assist with the process, and no completion date for the strategic review has been set.

The fitness maker just launched a new Bowflex BXT8J treadmill that can be paired with a phone or tablet, allowing access to the JRNY adaptive fitness app. The latest treadmill, $1,299, was priced with a recent survey in mind, which revealed to Nautilus that affordability is the most important feature of a treadmill and that cost can be a significant entry barrier.

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Peloton has become so associated with the idea of internet-connected stationary bicycles that the brand may become a fill-in for the concept, like how iPods were once used interchangeably with MP3 player or Kindle with e-reader. However, the market for high-tech stationary bikes is vast and had been developing long before the pandemic. Here are six Peloton alternatives to consider. If you are considering price points, owning a Peloton costs about $2,500 for the first year and $500 each year after, accounting for subscription fees.

Bowflex VeloCore ($1,699 – $2,199)

Right before lockdown and the rise of Peloton, Bowflex (a name you might remember from late ’90s/early ’00s infomercials) released its most advanced bike, the C6. The bike had no video screen, just a mount for a phone or tablet. In the age of connectivity, that would do and in October, the company presented the VeloCore. The range of costs mostly account for differences in size and touch-screen capabilities of the video panel.

Perhaps VeloCore’s most unique feature is “lean mode,” which allows users to angle from side to side, supposedly offering a more full-body workout. Reviewers praised the feature, as well as VeloCore’s sound-reducing magnetic resistance system and its media adaptability — it plays all the main streaming services and even works with Peloton and Zwift apps. Some noted lack of live classes and leadership boards, well-known aspects of the Peloton experience.

NordicTrack S22i ($1,999)

According to reviewers, the NordicTrack S22i sets itself apart with its ability to automatically adjust inclines, declines and resistance, creating a smooth ride. The Peloton alternative bike also includes virtual courses for its 22-inch screen, gathering praise for its simulations of riding through the jungles of Vietnam, the beaches of Hawaii or ruins in Turkey — an appreciated escape given the COVID-19-related hazards of travel. The bike also has a built-in fan that emulates the breeze on your face, showing NordicTrack really put stock in the stimulated experience. Reviewers also liked the 360-degree adjustable screen, which helped them when streaming non-bike-related content, but some said the seat was a little rough. Some have also grimaced at the generic workout music that comes with its programs, a sharp contrast with the playlists of hits available via Peloton’s contracts with Spotify and Apple Music.

SoulCycle At-Home Bike ($2,500)

With a price point and cult brand following to match, the SoulCycle bike is the cycle that comes closest to directly competing with Peloton. Reviews have praised its smooth ride and the high-resolution of the 21.5-inch screen, better by which to stream the fitness classes for which it is named. The bike doesn’t include a leaderboard and its metrics are limited to power output and calories burned (no heart rate), which some have attributed to SoulCycle trying to create an experience rather than a competition. That is not to say it’s limited to streaming Cycle content: like Pelotons, these bikes can connect to Netflix and other outside video apps. The corresponding subscription service for the bike, Equinox+, is also not a budget-minded purchase at $40 a month, but includes a range of classes outside of cycling. If the cost is an issue, the SoulCycle at-home can also be purchased in monthly installments of $64 over 39 months and the company now guarantees shipment in three weeks after some issues with delays.

Echelon EX5S Connect Bike (1,599)

Echelon’s EX5S Connect Bike mirrors many of the connectivity features that have elevated Peloton into a fitness craze, according to reviewers, including leaderboards, frequent live classes, a sizable and diverse library of on-demand workouts for the subscription fee, both involving the bike and not. The less fine resistance controls and lack of access to top music services seems to be the key difference to consider. The EX5S also doesn’t connect with outside programs, like Netflix, if you are the type to catch up on your shows during rides. On the plus side, some have liked the compact design of this Peloton alternative bike.

Myx ($1,299)

With a price tag several hundred dollars below a Peloton and most competitors, the question at the heart of the Myx is: Can a budget bike compare? Some reviewers think it can. The most noticeable difference is that most smart bikes use magnetic resistance whereas Myx uses friction resistance, losing some of the smoothness and quietness of a Peloton. However, Myx scored high points for its adjustable screen and handlebars, good for taller riders. Monthly subscriptions to its in-house video content are $29 and reviewers have noted a good array of non-bike classes, including barre, body sculpting, yoga and meditation. Also, Myx does away with leader boards and instead compares progress against users’ stated fitness goals, which may be more your style.

ProForm Studio Bike Limited ($1,499)

ProForm is trying to scoop up customers who don’t have a disposable grand to spend on a connected bike. Its Studio Bike Limited is available on a three-year payment plan for $39 a month. Reviewers have found the bike to be pretty similar to a Peloton, with classes available on its iFit program. The ProForm Studio Bike Limited doesn’t have automatic resistance control or heartrate monitoring, but those seem like bells and whistles many could live without.

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