Mar 5, 2024 - Economy

BowFlex files bankruptcy amid declining interest in cardio equipment

Illustration of a treadmill with a road closed sign on it

Illustration: Sarah Grillo/Axios

Americans are losing interest in cardio equipment — and that's causing fitness companies to sweat.

Why it matters: The home fitness industry was already reeling from slumping sales when exercisers returned to the gym after pandemic shutdowns — and now comes a shift in how people want to work out.

Driving the news: BowFlex filed for Chapter 11 bankruptcy protection Monday amid plummeting sales.

  • Johnson Health Tech Retail — which sells the Horizon Fitness, Vision Fitness and Matrix brands — was named as the leading bidder to acquire BowFlex with an offer of $37.5 million.

The big picture: Companies that bet big on the home fitness boom — like BowFlex, whose brands include Nautilus and Schwinn — are taking on water.

  • BowFlex's sales plunged 24.8% in the six-month period ended Sept. 30, compared with a year earlier, "driven primarily by lower customer demand," the company said.
  • Peloton's stock is hovering near its all-time low as the stationary bike company struggles to reverse its own sales decline.

The intrigue: But it's not just an issue of too much supply. Interest in cardio equipment is fading, and that's a problem for companies that rely on people working up a sweat.

  • "People are more interested in weights now than they were years ago and less interested in cardio," Planet Fitness interim CEO Craig Benson said in January at an industry conference.

BowFlex gets more than 46% of its revenue from cardio products, which experienced a 28.5% drop in direct-to-consumer sales for the last nine months of 2023, compared to the same period a year earlier.

  • Strength equipment product direct sales, meanwhile, grew 7.4% in the period, primarily driven by higher demand for home gyms.

Long term, people are expected to keep reaching for the weights.

  • The global market for strength training equipment is projected to grow at a 3.5% compound annual growth rate through 2032, outpacing 1.3% growth forecast for the wider global fitness equipment industry, according to Precedence Research, a market insights firm.

What they're saying: It's a generational thing.

  • Younger exercisers are more interested in weights and stretching, Benson says, which is causing Planet Fitness to dedicate extra space to those activities.
  • "We never had dedicated stretching" areas, he said.

Inside the room: BowFlex, whose corporate name was Nautilus until late 2023, has been seeking "strategic partnerships and sources of capital infusion" since summer 2021, according to a bankruptcy filing.

  • But the efforts failed to gain traction as the Vancouver, Washingt0n-based company is grappling with a glut of exercise equipment on the market following a short-lived spike in sales early in the pandemic.
  • "The marketplace is now saturated with product offerings from a number of sellers and retailers," CFO Aina Konold said in a court filing. "The Company's retailers continue to work through their existing inventory and have not reordered as expected."

The bottom line: "Fitness changes, trends change," Benson said. "So we need to reflect that."

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