Four-decades-old at-home fitness company, BowFlex, announced yesterday that it is filing for Chapter 11 bankruptcy – the company has been sold to Taiwanese exercise equipment company, Johnson Health Tech, for $37.5 million. Keep reading below for more details.
We reported on February 22 that Vancouver-based company BowFlex was running out of money and that the company was unsure if it could stay afloat. In its last SEC filing, BowFlex said that the company is facing a cash crisis, “adverse market conditions,” and operating losses. The company has also stated that it’s evaluating its assets and is expecting an impairment charge of approximately $21 million. BowFlex’s quarterly earnings report mentioned that the team has taken on an “increased workload.”
BowFlex, like many at-home fitness companies, benefitted from a demand for its exercise equipment – weightlifting pieces, treadmills, and stationary bikes – that people could utilize during the beginning of the Covid-19 pandemic when people stopped going to gyms in-person. Because of consumer demand, BowFlex ramped up its production in 2021, but it was unable to meet the moment – the company then found itself with a surplus of exercise equipment. The company has also suffered from a saturated connected fitness market with the likes of Peloton, NordicTrack, and Hydrow, to name a few.
So late Tuesday night, BowFlex filed for Chapter 11 bankruptcy with $140 million in assets, $126 million in liabilities, and $60 million owed to suppliers and manufacturing partners. BowFlex has said it will continue to operate amidst the bankruptcy but expects it will trigger 202 layoffs in Vancouver – though that will ultimately be up to the new owner, Taiwanese company Johnson Health Tech Retail (via Reuters).
BowFlex CEO, Jim Barr:
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.
BowFlex had been struggling for months, and the company had been upfront about its financial challenges, so the bankruptcy comes as no surprise.
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