At-home fitness brands have had a wild ride over the past few years.
Peloton rose to prominence during the darkest days of the covid pandemic as people opted to workout in their homes while gyms were closed or severely limited.
That felt like a new trend, but the reality is that at-home workouts have been passing fads since the 1970s. People bought exercise bikes and other home equipment with the promise of losing weight and getting into better shape without having to go to the gym because it seemed like an easy answer to a difficult problem.
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When people literally could not go to gyms, however, Peloton (PTON) and other companies saw sales surge. People wanted to stay in shape and many had extra money on hand because they could not travel, go out to eat, or do the things they normally spent money on.
In addition, at-home exercise equipment, specifically Peloton bikes, became a bit of a status symbol. It was trendy to be part of that community, and whether they used it or not, some people wanted to be part of the fad.
Lost in the resurgence of the at-home exercise was the company that arguably started the trend, BowFlex, which was formerly known as Nautilus. That company, which had retail stores in the 1990s, was left behind and now faces major questions about its survival.
Image source: Peloton.
BowFlex faces bankruptcy and/or liquidation
Before there was Peloton there was BowFlex, a producer of at-home exercise equipment including bikes and strength training machines. The company has a simple description of its mission on its website.
"We’re BowFlex Inc. a global leader in smart and connected home fitness with 35+ years of helping people build inner and outer strength. Through our BowFlex, Schwinn, and JRNY brands, we offer the wide range of exercise bikes, cardio equipment, and strength training products needed to fuel the joy of movement in thousands of people around the world every day," the company shared.
There was a time when the BowFlex brand was widely known, but the company's fortunes have suffered in recent years and it has issued a "going concern" warning.
"As a result of the continued challenging retail operating environment, deteriorating macroeconomic conditions, and decline in customer demand, we experienced a significant year-over-year decline in our revenue for the three and nine months ended December 31, 2023," the company said in a Securities and Exchange Commission filing. "Additionally, we now believe that conditions will not improve in the next several quarters, which is negatively affecting our liquidity projections."
BowFlex added that it has been working to access new working capital or to sell the company, "which may include making a voluntary filing under federal bankruptcy laws. 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."
The company's management said 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."
Bowflex faces a dire situation
Ragini Bhalla, who serves as head of brand for Creditsafe, paints a bleak picture for BowFlex's future.
"According to the company’s earnings reports, net sales were $90.4 million in Q2 2024, compared to $120.3 million the previous year. That was a decline of 24.8% and was attributed to lower customer demand. Things weren’t much better in Q3 2024, as the company reported sales of $67.57 million, compared to $98.08 million from the previous year," she said in an email to TheStreet.
Bhalla says the company faces significant challenges to its survival.
"Unless BowFlex addresses the factors contributing to its sales decline, such as adjusting its product offerings, marketing strategies, or addressing competitive pressures, it may continue to face challenges in generating revenue growth," she added.
Bhalla, however, does not believe that BowFlex is without hope.
"In summary, BowFlex faces significant challenges in its financial performance, including declining sales and profitability. But by addressing key areas such as sales strategies, margin management, cost control, and strategic adjustments, the company may improve its financial standing and position itself for long-term success," she said.
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