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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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.

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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.

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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 has launched the Schwinn 490 Elliptical, a connected fitness machine whose design is a direct response to customer feedback, addressing size, comfort, control and workout demands at an affordable price point. 

While there has been buzz about the post-pandemic return to gyms, Nautilus is targeting consumers who work out at home with its newest product.

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

One of the Schwinn 490 Elliptical’s key differentiators is its smaller, space-saving footprint, coming in at 12 inches smaller than its predecessor, the Schwinn 470. Customer input also led to the inclusion of fingertip control for workout adjustments, including the ability to adjust the incline from a 5 percent decline to a 15 percent incline.

The Schwinn 490 also features ergonomic updates for foot and hand placement to make workouts more comfortable, with a 20-inch stride. It also has multiple handrail and grip options and a mounting step. 

Nautilus Is All-In on Connected Fitness

The Schwinn 490 Elliptical is compatible with the JRNY adaptive fitness app, Nautilus’ digital fitness platform which provides users with hundreds of scenic Explore the World routes, trainer-led classes and personalized workout recommendations. The addition of Terrain Control Technology also automatically adjusts resistance with elevation changes during select Explore the World workouts in the JRNY platform.

The Schwinn 490 Elliptical retails for $1,299 and is available for purchase online and at retailers including Amazon, Nebraska Furniture Mart, Scheels, and Play It Again Sports.

Last Month, Nautilus announced it would be undertaking a “total company rebrand” designed to solidify its position in the connected fitness industry. The rebrand includes updated visuals as well as new connected fitness equipment and products.

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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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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. 

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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.”

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Nautilus says it is better positioned to navigate short-term macroeconomic challenges after amending its existing credit facility by refinancing its previous term loan with a new loan. 

The latest $30 million term loan increases the home fitness company’s total credit facility to $130 million.

Nautilus, which previously had a $100 million asset-based revolver and a $15 million term loan through Wells Fargo Bank, is being provided the new term loan by SLR Credit Solutions. The home fitness giant says that Wells Fargo will continue to provide the $100 million revolver and both facilities will mature in October 2026. 

The at-home fitness company says it will use the additional availability provided by SLR, along with its cash balance, to fund business improvements and growth initiatives as well as for general corporate purposes.

OceanArc Capital Partners LLC served as financial advisor for Nautilus to complete the transaction.

The Bowflex and Schwinn maker has been focused on its North Star Strategy, a long-term plan to double sales by 2026 as it examines opportunities to accelerate its digital transformation.

Nautilus Chief Financial Officer Aina Konold said, “Our increased credit facility, along with our cash balance, will allow us to finance key strategic and operating initiatives and drive to sustained profitable growth.”

“With no debt maturities until calendar 2026, we are well positioned to navigate short-term macroeconomic challenges while continuing to make progress on our North Star strategy,” Konold added. “We are very pleased to continue our partnership with Wells Fargo as our revolver lender and welcome SLR Credit Solutions as our New Term Loan lender.”

This past fall, the fitness company, headquartered in Washington, launched a comprehensive review of  strategic alternatives, including a potential sale.

Nautilus CEO Jim Barr reiterated in a Q2 2023 earnings call last month that interest in at-home fitness in a post-pandemic setting has been profound and enduring, and that it enhances Nautilus’s long-term opportunity.

Barr stated that the company’s research revealed that consumers, despite their financial constraints, are sticking with at-home fitness workouts. The findings showed that over 60% of adults in the US reported consistently working out at home, up from 43% at the start of 2020. Barr spoke with Athletech News back in July and discussed the future of fitness.

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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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It’s near to impossible to enter a gym or boutique fitness studio without knowing of, hearing of, or seeing a piece of Nautilus, Inc. equipment. The globally recognized brand, founded in 1986, is responsible for introducing leading cardio and strength treadmills, bikes, dumbbells and much more via the Nautilus, Schwinn, Bowflex, and JRNY brand names in 80 countries. 

As the fitness industry acclimates to a new, post-pandemic chapter, Nautilus continues to offer state-of-the-art fitness solutions and various innovative ways to exercise, whether indoors or out. Current CEO and Board Member Jim Barr joined the company in July 2019, and since then has maximized his extensive leadership and marketing skills along with consumer growth knowledge to further elevate Nautilus, Inc. The University of Chicago Booth School of Business graduate led famously known brands including OfficeMax, Sears Holdings Corporation, MSN Business Development, and Microsoft in executive roles. After adding two key new talents to Nautilus’ Board of Directors — REI Senior Vice President and Chief Financial Officer Kelley Hall & The Washington Post’s Chief Information Officer and Vice President of Digital Product Development Shailesh Prakash — in 2021, Barr told Athletech News then that the business move had come “at a pivotal time for the company, as it continues its long-term strategic plan.”

Now, one year later, Barr’s plans are seemingly coming into clearer form. The forward-thinking business leader tells Athletech News he believes the future of fitness is wrapped up into three rapidly evolving trends: connected fitness, hybrid fitness and holistic fitness and wellness. With his finger on the pulse of these growing movements, Barr remains focused on making sure Nautilus continues to properly serve its clientele in the post-pandemic era and amid economic unpredictability. Read on to learn more about his vision for Nautilus, Inc. and more in this edition of our CEO Corner series. 

Athletech News (ATN): Tell us about your background

Jim Barr: Throughout most of my career, I’ve gravitated toward positions that focus on the intersection of technical innovations and changing customer needs. Thematically, I enjoy finding otherwise good/leading companies that just missed a trend—a change in value proposition, the market, and/or a technological disruption—and helping them recover and thrive through digital growth transformations. I’ve done that in multiple industries, including retail, publishing, ecommerce, heavy equipment auctions, and now fitness. It is tremendously rewarding to see people and companies get back on track and achieve success.

A seminal experience came during the decade I was leading Microsoft’s online businesses beginning at the dawn of the consumer internet. Change was constant— in business models, industry structure and consumer needs. I learned to never become comfortable with the status quo, to keep adapting to change, and thrived in a transformational role that utilized customer insights, technological innovation, and a world-class team to enhance our digital products and services and improve the customer journey.

This passion for reinvigorating growth in companies and brands that are addressing changing value propositions, customer behaviors, and technologic disruptions, led me to roles with Ritchie Bros., OfficeMax, and Sears prior to joining Nautilus.

ATN: Please tell us about Nautilus, Inc. and how your role as CEO came to fruition

Jim Barr: Nautilus, Inc. has an incredibly rich 35-year heritage and is recognized as a leader in home fitness equipment with legacy brands Bowflex and Schwinn Fitness in our portfolio. We are in the most exciting chapter in the company’s history, and I’m extremely fortunate to be part of it.

When I joined Nautilus in 2019, it was clear that the company needed to undergo a digital transformation and we immediately began work on our North Star strategy, which is grounded in consumer insights. It builds on our strengths—well-known brands, a broad portfolio of strength and cardio products at multiple price points, strong omni-channel distribution, and a strong company culture anchored on a noble mission to help people live healthier lives through fitness. It also had to address key weaknesses, such as missing the connected fitness trend, targeting the wrong consumer segments, and dated go-to-market techniques.

Our strategy to transform from an equipment company to one focusing on comprehensive fitness experiences that span equipment, software, and content has enabled us to double our revenue in less than two years and reach an expansive audience – over 325,000 digital members and counting. This work was underway before the pandemic, and we accelerated it to ensure our customers, partners and other key stakeholders could more easily engage with us across all channels. We learned to be agile during the pandemic, which will serve us well post-pandemic and economic uncertainty.

I’ve worked for a lot of companies, but the level of personal commitment and dedication from our employees are like nothing I’ve seen before in my career. Nautilus’ culture centers around collaboration, innovation, transparency, giving and fun, and employees are very passionate about our mission: to empower healthier living through individualized connected fitness experiences.

ATN: What is your greatest accomplishment?

Jim Barr: My family—as a husband and father to our three great kids—two who work in the digital arena, and one in the medical field, and seeing them grow up, thrive and be happy.

Professionally, I have enjoyed each transformation and seeing people develop and succeed by doing things even they did not think were possible. Later, it’s seeing them go on to achieve great things and career satisfaction and talk about how our time together and our team really influenced them and fueled their passions. Those are the moments when I feel the most accomplished. Good leadership impacts many people and is multiplicative.

ATN: When have you failed? Talk about your failures? What have you learned from them?

Jim Barr: My first transformation opportunity with Encyclopaedia Britannica back in the 1990s   was more of a failure than a success but it fueled my passion for future roles. We were defining ourselves as a direct-seller of books and thought we were insulated from substitutes, first “lesser” bands of reference materials, then superior electronic substitutes. At first, we fought it, then we came up with online and multimedia versions of Encyclopaedia Britannica, Compton’s Encyclopaedia and Merriam-Webster dictionaries. We had to change the business model as well, since these new electronic versions could not go to market in the same way.

Ultimately, we tried to pivot the company to a transformation around electronically indexing the world’s knowledge, what is now known as a search engine, but that strategy did not take hold in time. While Encyclopaedia Britannica is still around, it’s  much smaller and some people view it as one of the first dinosaurs of the internet age.

This experience opened my eyes to the concept that things change fast—a 200-year-old company with the top brand in the industry could be disrupted quickly, and no company is completely safe if it does not evolve based on changing consumer needs. Consumer insights that measure and react to changing habits, and keeping a broad view of substitutes were also key lessons.

Although we did not react quickly enough or as dramatically as we needed to, my passion for transformative situations was fueled.

ATN: What motivates you?

Jim Barr: What motivates me, first and foremost is doing something hard and being successful by taking on challenges many others haven’t. I enjoy being a change agent, thinking strategically, setting the direction and being a positive, persistent, and authentic leader. I like coaching people and inspiring teams. Seeing them be successful is incredibly rewarding. Now that I am closer to the end of my career than the beginning, the idea of leaving a positive legacy for the people and companies I’ve been involved with has become a motivator.

ATN: What did you want to be when you grew up?

Jim Barr: My father was a big influence in my direction. He was an executive in telecommunications and later a CEO in that industry. We had many discussions at the dinner table about business, values, leadership, and people. He never pushed me in a particular direction, but I could see how much of an impact he had on results and people. From a young age, I had a role model in my father and thus knew I wanted to run a business, to be a general manager with P&L responsibility someday.

I structured my early career with that objective in mind. I wanted experiences in many different functions and early opportunities to manage people and projects. I started out as a CPA, which helped me understand financial statements and business drivers. I spent time as a dealmaker and a management consultant while getting my MBA in finance before leading the strategy in my first transformation and then taking a general manager role at Microsoft.

It’s ironic that most of my career has been in ecommerce and digital—things that really did not exist when I was growing up or in college. It’s a good lesson for young people who do not know exactly what they want to do early—don’t stress about that, instead collect experiences and learn critical thinking and problem-solving. Your path will reveal itself.

ATN: Where do you see the future of fitness going?

Jim Barr: It’s been fun to see the fitness industry evolve and grow over the past few years and the future is exciting and the opportunity is robust. I see three key trends:

1. Connected fitness is here to stay.
2. Fitness has gone hybrid.
3. A more holistic view of fitness and wellness is evolving.

Connected fitness is here to stay: The traditional model of working out alone and unconnected resulted in people getting bored with the workout options and not staying consistently on their fitness journey.

Connected fitness brings a variety of ways to work out so you’re less likely to become bored. People are staying with it longer—one day they can simulate running in the Alps, the next they can be coached while watching a streaming service or attending a class. All the while, their progress is recorded, which is also motivating. Thus, while I still see specific modalities continue to become out of favor, connected fitness is here to stay and will continue to evolve. We are in the early innings on how connectivity can create superior fitness experiences.

Fitness has gone hybrid: Fitness habits changed profoundly and for the long-term during the pandemic. It used to be that people chose between gyms and home fitness, but as consumers head back to the gym, home fitness remains more popular than pre-pandemic. More people discovered the convenience of working out at home and how connectedness provided many of the benefits they had at the gym, such as [a] variety of workouts and interaction with others.  

The hybrid work model is also a big influence on these fitness habits. While as many as 30% of former gym goers say they will never go back to the gym, many people are building their own home gyms so they can exercise on the days they work from home. Our research shows that about 4 in 10 people worked out at home pre-pandemic and that has held steady for over a year with 7 out of 10 who are working out at home.

A more holistic view of fitness and wellness is evolving: First, our definition of wellness is broadening to include aspects like nutrition and mental well-being. I see these coming together at least digitally to provide a more comprehensive ability to help people live healthier lives. Second, we are focused on consumers’ internal motivations for wellness and supporting their emotional well-being.

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Nautilus, Inc. — which designates itself as “an innovation leader in personalized connected home fitness” and is led by CEO Jim Barr — has added two new talents to its Board of Directors, Ms. Kelly Hall and Mr. Shailesh Prakash. In its release, the company notes these additions come at “a pivotal time for the company, as it continues its long-term strategic plan.”

Speaking exclusively with AthletechNews.com on the news, Barr noted why they’re so happy to have these two leaders.

“We’re pleased to welcome Kelley and Shailesh to our board and look forward to having their guidance as we continue executing our long-term business transformation strategy,” Nautilus CEO Jim Barr told Athletech News. “They bring critical expertise in managing omnichannel strategies and leading digital growth initiatives, which are two key components of the future growth of Nautilus, Inc.” 

Filling pivotal roles

Hall is recognized for her expertise in financial decision-making. Currently she’s Senior VP/Chief Financial Officer at REI, which she joined in 2019, describing it as a company with a “mission to connect more people to a life outdoors.” REI’s a “specialty outdoor retailer,” providing “best quality gear, inspiring expert classes and trips, and outstanding customer service.” Hall handles financial planning and analysis, taxes, asset protection teams, and an extensive list of other financial leadership roles.

Prakash is joining Nautilus while handling extensive responsibilities as the Chief Information Officer and Vice President of Digital Product Development at The Washington Post. In 2017, Fast Company named Prakash “One of the Most Creative People.” Beginning his career as a software engineer, he said about that nomination that at the Post, “We’ve shifted from an IT mind-set to an engineering one,” which ensures “that our journalism can reach everyone.” 

The Nautilus release notes that Prakash has brought the Post “tremendous digital growth,” breaking ground in “all aspects of product development and technology, including web, mobile, video, print and advertising.”

Expanding despite downward trend

Nautilus leadership provided insights from both new board members. Hall’s message emphasizes that this is an “exciting time in the company’s evolution,” while Prakash is looking forward to being part of Nautilus during “this transformational time in the company’s journey as a leading innovator in connected home fitness… .”

Indeed, Nautilus tells investors that it’s “poised for growth,” and that it’s “…well-positioned in large, growing markets with favorable demographic trends.” It continues that the company “… is committed to continue strengthening its omni-channel distribution strategy, digital innovation,” and more.

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Nautilus, Inc. (NYSE: NLS), an innovation leader in connected home fitness, today announced that it has hired John Goelz as Chief Supply Chain Officer, effective immediately. In this new position, Goelz will lead the transformation of Nautilus’ global end-to-end supply chain to deliver innovative strategies, including sourcing, procuring, cost management, manufacturing, warehousing, transportation and distribution to accelerate product delivery.

Goelz brings 15 years of experience in directing supply chain and material planning, including designing and executing processes and procedures utilizing innovative strategies to optimize cost efficiencies and enhance the customer experience.

Most recently, Goelz was vice president of global supply chain for the Master Lock Company – a leader in global safety and security – where he led the organization’s strategic transformation of its supply chain operations; while aligning the execution of global strategies with corporate goals.

Prior to that, Goelz held various positions overseeing supply chain, sales, and operations for Rockwell Automation, where he provided guidance and support for business readiness and process deployment.

“John brings the experience needed to turn our supply chain into a strategic advantage to better meet demand, improve the customer experience, and accelerate our product development and delivery,” said Jim Barr, Nautilus, Inc. Chief Executive Officer. “John’s global manufacturing and production expertise is pivotal to executing an optimized and scalable supply chain to support our aggressive growth plans.”

Mr. Goelz commented, “I couldn’t be more thrilled to join an organization that is disrupting home fitness and understands the critical role the supply chain plays in achieving our long-term growth goals. I also have a personal interest in fitness as a hobby athlete – having competed in various endurance activities both running and cycling – and look forward to contributing to other people’s fitness journeys.”

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Nautilus, Inc. (the “Company”) (NYSE:NLS), the innovation leader in home fitness for over 30 years, announced today that the Company has completed the sale of its commercially focused Octane Fitness business to TRUE Fitness Technology, Inc. (TRUE) for $25.0 million. TRUE also assumed $3 million of warranty liabilities and $0.5 million of vendor recourse lease obligations. The transaction was signed and completed on October 14, 2020.

“The sale of Octane Fitness aligns with the larger strategic enhancements we are making as a business to streamline our operations and accelerate the transformation of the consumer side of our business”, said Jim Barr, CEO of Nautilus, Inc. “We are focused on dramatically enhancing connected in-home fitness and continuing to provide our customers with cutting-edge technology and a superior customer experience. We will use the proceeds of this transaction and our improving balance sheet to continue the transformation of our leading fitness offerings.”

William Blair served as the exclusive financial advisor to Nautilus for the transaction.

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New Bowflex VeloCore (un) stationary bike redefines indoor cycling (IC) by including a stationary setting and lean mode.

This connected bike integrates the JRNY platform, which delivers engaging digital content on a large touch screen, and custom coaching; it also connects with third-party cycling apps, including Peloton® and Zwift®.

Nautilus, Inc. (NYSE:NLS), the innovation leader in home fitness for over 30 years, announced the new Bowflex® VeloCore – the industry’s first (un) stationary, dual-mode bike that combines leaning technology with digital connectivity for a dynamic full body workout and an immersive digital experience.

For the first time, consumers can choose their riding style – leaning or stationary mode.

By engaging the lean mode feature, Bowflex VeloCore riders can push and pull the bike from side-to-side, replicating the movement of outdoor cycling. The high intensity workout helps strengthen and tone the arms and core.

For added versatility, the VeloCore bike comes equipped with a proprietary, patent-pending lock-out feature that keeps the bike in stationary mode, so users can opt for a traditional cycling workout.

The bike features an integrated high-definition touch screen console, which provides JRNY members access to the JRNY library of motivating and engaging digital content. JRNY members can take curves while riding outdoor routes via Explore the World videos, which includes a virtual coach offering instructions, encouragement, and fitness tips during the ride. Based on an initial fitness assessment and analysis of each workout, JRNY members receive customized coaching and workout recommendations.

“Quite simply, the VeloCore bike represents a totally new way to cycle at home by offering a fully customizable experience. The bike is loaded with advanced technology and digital options to keep users motivated, engaged and entertained. Our lean technology dials up the fun factor and workout payback,” said Jim Barr, CEO of Nautilus, Inc. “We know consumers are adopting new fitness habits and are eager for fresh challenges as they strive to improve performance and reach their workout goals. We’ve doubled down to offer innovative fitness products to meet increased demand.”

According to a recent survey conducted on Nautilus’ behalf by YouGov, 60% of U.S. fitness consumers* said that they would like a stationary bike that could simulate the way it feels to ride outside and 68% would use an indoor bike at home if it provided a more effective workout than the standard stationary bikes currently available. Further, 94% of these consumers said that they use some form of entertainment while working out.

The survey also found that the percentage of these consumers working out at home on a weekly basis has increased from 43% before COVID to 73% during COVID, and 27% started using cardio machines at home only after the start of the COVID-19 outbreak. What’s more, 26% of those who went to gyms prior to COVID-19 do not plan to return to the gym.

VeloCore users with a JRNY membership will have access to a library of more than 75 trainer-led cycling and workout content with real-time feedback and tracking, including time, interval, distance, calories, burn rate, heart rate, cadence, resistance and lean. For JRNY members, custom workouts are recommended based on each user’s individual fitness profile, workout history and performance.

JRNY members will also have more entertainment options, including Bowflex radio and the ability to watch stream services such as Netflix, Amazon Prime Video and Hulu on the console’s HD screen while doing a workout.** Users aren’t limited to one workout experience and can connect to other world-class cycling apps, including Peloton® and Zwift®.***

*All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1066 US adults aged 18 to 64 years old who have spent $500 or more on fitness in the past year. Fieldwork was undertaken July 27 – August 3, 2020. The survey was carried out online.
**Requires a subscription to the streaming service, not included.
*** Requires a tablet or phone and separate third party subscription, not included. There is no affiliation with Peloton or Zwift.

Bowflex VeloCore Bike

The Bowflex VeloCore bike includes the following features:

• Proprietary, patent-pending lock-out feature for the beginner or when standard IC bike programming is desired.
• 22” or 16” console with HD LCD touch screen (21.5” or 15.6” measured diagonally) and premium sound bar to provide easy access to the JRNY experience that fully immerses users in their fitness experience.
• Unlimited user profiles for JRNY members.
• Magnetic resistance system for a smooth, quiet ride.
• Intuitive resistance knob, which allows for 100 resistance levels to meet the needs of the individual user.
• Power measurement and side-to-side programming.
• Dipped handlebars offer six hand positions and adjust horizontally and vertically for versatility.
• Built-in media rack near the console for a phone or tablet is equipped with USB charging ports.
• Race-style high-density adjustable foam seat, offering comfort for long rides.
• Dual-link pedals with detachable toe cages so users have the option of using standard toe cages or SPD clips.
• Heart rate monitoring via Bluetooth armband, dual water bottle holders, and easy-reach cradles with 3 lb. dumbbells.

The Bowflex VeloCore bikes are priced at $2,199 for the 22” console and $1,699 for the 16” console. Both bike models are available for purchase on Bowflex.com and at select retailers.

JRNY Experience

JRNY’s adaptive coaching technology uses AI algorithms, data from an initial assessment, and tracking from previous workouts to create personalized daily workouts. Each custom workout is adjusted automatically based on how the user is feeling, how much they improve, and their past performance. Users also receive real-time feedback and expert guidance from a virtual trainer, as well as rewards to celebrate their achievements.

The stand-alone JRNY platform is available on Bowflex.com and for download in the Google Play and iOS Stores and comes pre-loaded on the VeloCore bike. VeloCore bike purchasers receive a 2-month free JRNY membership, which allows access to the JRNY experience. Following the trial period, a JRNY membership will cost $19.99 per month or $149 per year.

About Nautilus, Inc.

Nautilus, Inc. (NYSE:NLS) is the global leader in innovative home fitness solutions. The company’s diverse brand portfolio includes Bowflex®, Nautilus®, Schwinn®, and Octane Fitness®, and a broad selection of exercise bikes, cardio equipment and strength training products. Nautilus, Inc. utilizes technology to develop personalized, connected fitness solutions that empower and motivate people to live a healthy lifestyle. The company sells its products through direct and retail channels, as well as in commercial channels. Nautilus, Inc. uses the investor relations page of its website (www.nautilusinc.com/investors) to make information available to its investors and the market.

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