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  • Roger Yao

Fitness Equipment Industry news - Week35

1. Fitness equipment company Fitell goes public on NASDAQ: Raises $15 million, but stock plummets 50% two weeks later

On August 8, 2023, Fitell Corporation, the online retail giant in Australia's fitness industry (stock code: FTEL), successfully debuted on the US NASDAQ. The initial stock price was $5 per share, with a total of 3 million shares issued, raising a total of $15 million.

Fitell plans to use the raised funds for various purposes, including expanding its online fitness and gym equipment business, advancing research and development of smart connected devices, interactive platforms, and mobile applications, further expanding its licensing business, actively considering potential merger and acquisition opportunities, as well as for operational capital and general corporate use.

The company's subsidiary, GD Wellness, offers a variety of fitness equipment products under three brands, including dumbbells, barbells, squat racks, fitness benches, and more. Additionally, Fitell provides comprehensive solutions for individual fitness studios and chain gyms. The company is also actively engaged in the development of smart fitness devices.

However, Fitell faced adverse effects from the capital market after going public. As of August 25, Fitell's stock price has dropped to $2.55 per share, nearly half of its initial offering price. Based on the closing price at that time, the company's market value was $28.36 million. It's worth noting that the company had revenues of $3.05 million in the second half of 2022, but incurred a net loss of $60,000.

2. Echelon Strength Pro Provides Cutting Edge Personalized Digital Training

Echelon, a global fitness and wellness leader, has introduced the Echelon Strength Pro, the latest addition to its smart fitness lineup. This advanced fitness equipment system features cutting-edge technology and user-friendly design. It includes a 24-inch HD touchscreen, digital resistance control, and versatile adjustability. Guided instructor programs cater to users of all experience levels, with interchangeable accessories enabling diverse workouts.

Key features of the Echelon Strength Pro:

1. **Multiple Resistance Modes**: Offers various resistance modes and movements, accommodating different exercises and body types.

2. **Access to Workouts**: Customizable and saveable workouts are included without the need for new subscriptions, accessible to active members.

3. **Noise Abatement**: Designed with noise reduction, space efficiency, and a multi-year commercial warranty for an improved customer experience.

4. **Easy Installation**: Wall fasteners are not required, making it practical for real-life spaces.

5. **Safety and Education**: Designed for safety, it provides proper form demonstrations and education for all skill levels.

The Echelon Strength Pro is versatile for both commercial studios and home gyms. Lou Lentine, CEO of Echelon Fitness, highlighted its inclusivity and accessibility for various settings, such as apartments, boutique gyms, and hotels.

Echelon's product range caters to fitness enthusiasts, athletes, and studio owners. The new strength machine offers live and on-demand workouts through the Echelon Fitness app, with a focus on delivering a premium workout experience without noise concerns or equipment durability issues.

Echelon products are available worldwide in gyms, hotels, and homes. The Echelon Strength Pro can be pre-ordered and is set to ship in early October at a price of $4,999. This launch expands Echelon's fitness offerings, helping users enhance their fitness journey while addressing the needs of commercial spaces and individual users alike.

3. Peloton launches "Peloton for Business,"

Peloton Interactive Inc., known for its high-end home-gym equipment, is shifting its focus to become a workplace perk provider. The company is launching "Peloton for Business," targeting small and midsize firms, making it easier for them to offer Peloton services to employees and customers. This move aims to expand Peloton's presence in sectors such as hotels, corporate wellness, apartment buildings, education, healthcare, and neighborhood gyms.

After facing financial challenges due to post-pandemic changes, Peloton is seeking to diversify its offerings beyond at-home workouts. The company is leveraging its mobile app, allowing users to access workouts without purchasing Peloton equipment. With the business initiative, Peloton is allowing employers to offer the app as a worker benefit, along with equipment discounts. This expansion is being facilitated in collaboration with Sequoia, included in the firm's Wellbeing Bundles.

Peloton's strategy also involves partnering with hotels, residential buildings, and office gyms to provide their equipment as a complimentary perk. A deal has already been struck with Hilton Worldwide Holdings Inc. to place Peloton bikes in hotels. The company is also collaborating with the YMCA to equip fitness centers.

Greg Hybl, former executive at American Express Co., has become the general manager of Peloton for Business. This initiative is being launched across Peloton's five markets: the US, UK, Canada, Germany, and Australia. The demand for wellness perks from businesses aligns with the company's focus, aiming to tap into the growing interest in health and well-being for both customers and employees.

Peloton sees potential benefits from corporate clients, offering more stability compared to its recent tumultuous years. In initial corporate benefit offerings, the company has achieved a 93% year-over-year retention rate and commercial customers often commit to three-year partnerships.

The "Peloton for Business" initiative represents a strategic move to adapt to changing consumer behaviors and expand its reach beyond individual customers to corporate clients seeking wellness solutions for their workforce.

4. Peloton's fourth-quarter loss narrows by 80.8%.

Recently, Peloton released its performance report for the fourth quarter of 2022. In the three months leading up to June 30th, Peloton achieved a revenue of $642.1 million, which falls within the midpoint of the guided range of $630 million to $650 million. While analysts generally expected a revenue of $640 million, the actual performance closely aligned with expectations. However, the company's net loss was $241.8 million, a reduction compared to the $1.26 billion loss during the same period last year.

Despite the significant reduction in losses, Peloton still noted that the losses exceeded expectations. This is primarily attributed to increased holiday season marketing expenses and costs associated with the recall of 2.2 million bikes. Due to these reasons, Peloton couldn't achieve its cash flow breakeven goal in the latter half of the fiscal year 2023. Additionally, the company anticipates a decrease in the number of subscribers to its connected fitness platform.

It's worth noting that on August 23rd, Peloton's stock price declined by $1.58, marking a 22.6% decrease and hitting a historic low of $5.41. From the beginning of the year until now, Peloton's stock price has experienced a cumulative decrease of 31.86%, causing the market capitalization to fall below $2 billion.

5. Gympass raises US$85m, hits US$2.4bn value and logs its 300 millionth check-in

Gympass, a corporate wellbeing aggregator, has achieved a valuation of $2.4 billion, up from $2.2 billion two years ago. The company has secured $85 million in Series F funding led by EQT Growth. Existing investors General Atlantic and Moore Strategic Ventures are also increasing their stake in the company. Gympass, founded in Brazil in 2012 and now based in the US, plans to use the funding to expand globally and invest in product innovation for its primary customer segments: operators, corporates, and employees.

CEO and co-founder Cesar Carvalho stated that organizations are shifting towards holistic and preventative wellness benefits to improve employee wellbeing and productivity while reducing costs. The company's network of partners, including 24-Hour Fitness, Barry's, Headspace, Life Time, and Orangetheory, has contributed to its growth. Gympass has grown its customer base by 80% to 15,000 corporate customers in the year to July. The company's pivot from consumer to corporate focus has proven successful, with research showing that physically active employees can reduce company healthcare costs by 35%.

Gympass's switch to the corporate market proved lucrative, with its first corporate customer, PricewaterhouseCoopers, bringing in more customers in three days than the company's retail customer base. This shift was driven by the legal duty of companies to ensure employee wellbeing and a financial interest in preventative healthcare for employees. Gympass plans to continue leveraging its strong market position and partner network for further growth.

6. US sports goods retailer DICK'S Sporting Goods had an increase in revenue but a significant 23% decline in profits.

Recently, US sports goods retailer Dick's Sporting Goods announced its Q2 2023 financial results. The report revealed a 3.6% year-on-year growth in revenue, reaching $3.22 billion. However, the net profit witnessed a substantial 23.4% year-on-year drop, amounting to only $244 million. The company's President and CEO, Lauren Hobart, explained that the profit decline was primarily due to the impact of promotional efforts to clear inventory, especially within the outdoor category. Nevertheless, the company's inventory has significantly decreased at present.

Considering the Q2 performance and the expected revenue pressures and inventory-clearing promotional measures in place, the profitability for the second half of the year will continue to face challenges. Dick's has adjusted its full-year earnings expectations, now estimating them to be between $11.33 and $12.13 per share. However, Hobart also emphasized that Dick's still holds strong prospects for long-term growth, particularly highlighting the success of the experiential "House of Sport" concept and similar updates to Dick's stores.

In addition, insiders have revealed that Dick's has initiated business optimization and plans to lay off 250 employees. The company clarifies that the impact of these layoffs will primarily affect the headquarters' customer support center, which accounts for less than 10% of the company's workforce. Through this reduction, the company aims to save on expenses and reinvest in more personnel and technological advancements.


Roger Yao (


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