Posted on 04/16/2008 6:31:07 PM PDT by LomanBill
(Excerpt) Read more at forbes.com ...
They rode up the swing for the past few years.
I like their equipment, but they are responsible for right-sizing for demand.
I can’t remember the last time I saw a Nautilus commercial. I went to one gym that had Nautilus equipment and I wasn’t impressed, uncomfortable and harder to adjust than any of the other equipment. Really never been impressed by them.
>>They didn’t plan well for the demand.
Ack wait. You mean the *Lack* of demand. They didn’t downsize to compensate for lack of demand, correct?
That makes more sense. Duh.
Nautilus, Inc. is a pure fitness company that provides tools and education necessary to help people achieve a fit and healthy lifestyle. With a brand portfolio that includes Nautilus®, Bowflex®, Schwinn® Fitness, StairMaster®, Trimline® and Pearl iZUMi®, Nautilus manufactures and markets a complete line of innovative health and fitness products through direct, commercial, retail, specialty and international channels.
Hmm that’s weird, they have Schwinn Fitness but as near as I can tell don’t own Schwinn, must be a name license deal, or the ownership change is a lot more complex than I thought.
Do a charge-back on your credit card. You won’t have to pay for your lost purchase.
>>or the ownership change is a lot
>>more complex than I thought.
Yep. Apparently Mr. Bramson, the new CEO of Nautilus, is a British hedge fund mucky muck.
Did Nautilus just get eaten by a bigger fish?
Seems like a subprime derived firesale. More to come?
>>Do a charge-back on your credit card.
>>You won’t have to pay for your lost purchase.
Hmmm, didn’t know I could do that. Never had to do it before.
Thanks for the tip, FRiend :-)
I’m not really convinced subprime has anything to do with it. They’re equipment isn’t that expensive, people shouldn’t be taking out weird loans to buy it. I think they just plain screwed the pooch, it’s been at least 6 months since I saw a commercial for any of those product lines, and usually Bowflex commercials are everywhere. A 1 quarter crash like that usually relates to management screw ups more than any external force.
They still advertise a lot on Fox Soccer Channel.
Interesting image. Who is that man and what is his story?
Anybody taking out equity loans to buy exercise equipment is on a bad path with or without the subprime problems. Unless you’re actually getting enough to open a gym and charge access gym equipment should at worst be a credit card purchase.
I must not be hitting the healthy parts of the internet, I don’t think I’ve ever seen an ad for any gym equipment on the net.
Or they over extended in purchasing other companies. One thing I can definitely point to given that list of “families” from their website is they have seriously diluted their name recognition. At one point they had the most recognizable name in exercise, and they still have some of the most recognizable names, but who would know those are all Nautilus without going to the website, making your products compete with each other is never a good idea, use your name, make the products a suite.
Sherborne Proposes New Nautilus Regime
VANCOUVER, Wash.— Fitness equipment company Nautilus Inc. and a dissident shareholder, hedge fund Sherborne Investors LP, each made its pitch for support in letters to Nautilus shareholders in the middle of this month asking for their votes at a shareholders meeting scheduled for Dec. 18.
In its Nov. 14 letter, Sherborne described itself as a turnaround investment firm with a long-term strategy. It said Nautilus' profitability has declined because management has diverted sales from high gross margin direct sales to the lower margin retail channel.
Among the other problems it cited: The quality of accounts receivable is lower in the retail channel, the inventory is more complicated and the acquisition of Land America Health and Fitness Co. has produced inadequate return and has increased margin risks.
In a response, mailed to investors Nov. 15, Nautilus described Sherborne as "an opportunistic hedge fund that is trying to take advantage of Nautilus' first and only [emphasis in original] unprofitable quarter in its history as a public company."
It criticized in particular Sherborne's principal, Edward Bramson, also one of Sherborne's three nominees for the board. It said that he has a poor track record at Ampex, a data storage company. Mr. Bramson resigned as Ampex' chief executive and chairman in February of this year.
"It appears to Nautilus that Bramson and the other Sherborne nominees have no relevant fitness industry experience and we are convinced that Bramson's track record with Ampex is the very opposite of what one would want in a Nautilus director."
Doesn’t look like anything about subprime, they changed their selling methods to ones with more overhead and lower margins. Management screw up.
Anybody taking out equity loans to buy exercise equipment is on a bad path with or without the subprime problems. Unless you’re actually getting enough to open a gym and charge access gym equipment should at worst be a credit card purchase.
"Credit Card purchase." Bingo. Vaporization of home equity stopped the "refi and pay off the credit cards" merry-go-round
I must not be hitting the healthy parts of the internet, I don’t think I’ve ever seen an ad for any gym equipment on the net.
I've particularly noticed they've been pushing their Bowflex Revolution. The advert has Brett Favre endorsing / using the product. Probably related to this ad campaign.
Or they over extended in purchasing other companies.
Subprime, bankruptcy, corporate raiding - all ugly business. Looks like Nautilus is caught in the nexus.
One thing I can definitely point to given that list of “families” from their website is they have seriously diluted their name recognition. At one point they had the most recognizable name in exercise, and they still have some of the most recognizable names, but who would know those are all Nautilus without going to the website, making your products compete with each other is never a good idea, use your name, make the products a suite.
Good point. An example is the way the Schwinn brand recumbent bikes ($549) undercut the Nautilus brand recumbent bikes (over $3000).
Gluttony is one of the seven deadly sins. Gotta wonder if these corporate raider types, gobbling up companies just because they can, have ever produced anything of real value in their predatory existences.
And now the Nautilus fish has been eaten by an even bigger fish:
"an opportunistic hedge fund that is trying to take advantage of Nautilus' first and only [emphasis in original] unprofitable quarter in its history as a public company."
Maybe Nautilus is just reaping what they have sown.
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