Suddenly! Another Amazon seller files for bankruptcy

Recently, another Amazon blockbuster collapsed.

BowFlex, a popular fitness equipment brand on Amazon, files for bankruptcy

It is understood that BowFlex, a well-known fitness equipment seller on Amazon, has filed for bankruptcy protection in a US court.

According to the bankruptcy protection documents filed by BowFlex, BowFlex plans to lay off 200 employees and enter Chapter 11 bankruptcy reorganization.

The company's bankruptcy is related to the sharp decline in product demand. In recent years, the growth momentum of the BowFlex brand has gradually faded, and the company's operations have also been directly affected.

At the same time, BowFlex also sold its remaining assets, and Taiwan-listed Johnson Healthcare has confirmed that it will acquire the company for only US$37.5 million.

Although BowFlex has entered bankruptcy proceedings, it is still operating normally, and the company's products are being sold normally on its official website and e-commerce platforms.

BowFlex was founded in 1986 and is headquartered in Washington State, USA. It is the R&D, manufacturing and global marketing company of American fitness equipment brands Bowflex, Schwinn and its adaptive fitness platform JRNY. Its main products include compound elliptical trainers, smart cardio machines, adjustable dumbbells, home gyms, etc. Its products are widely welcomed by consumers and have been on the Best Sellers list of Amazon US site many times.

In 1999, the company changed its name to Direct Focus and initiated its initial public offering on NASDAQ.

Driven by capital and high market demand, the company's performance also ushered in rapid development. It successively acquired Nautilus, Schwinn Fitness and Stairmaster, and merged them into the current Nautilus Company.

On March 18, 2014, Nautilus rang the opening bell at the New York Stock Exchange.

In the company's more than 30 years of development, it has focused on the design and development of home fitness equipment, and is committed to helping users achieve various professional fitness at home.

BowFlex has entered a period of rapid development since 2020. During the epidemic, gyms across the United States were forced to close, and more and more people chose to exercise at home, so the demand for home fitness equipment soared.

Sales of many of BowFlex's products grew rapidly, with annual revenue reaching as high as $500 million at the time.

BowFlex's most popular product is the adjustable dumbbell, which sells for more than $400 on Amazon, has received more than 20,000 reviews, and has sold more than 4,000 units in the past month. Even in the off-season, sales can reach more than 3,000 units per month.

However, in the post-epidemic era, more and more consumers are returning to offline fitness. Coupled with the impact of the global economic situation, the sales of BowFlex's products have dropped significantly, and the company's performance has plummeted.

According to BowFlex's second quarter 2023 financial results released on September 30, 2023, the company's net sales in the second quarter of 2023 were US$48.7 million, a decrease of 25.7% from US$65.5 million in the same period last year.

In terms of performance of different channels, the net sales of the direct sales market were US$20.7 million, down 15.3% from the same period last year, and the net sales of the retail market were US$27.8 million, down 30.4% from the same period last year. Among them, the sales of aerobic equipment decreased by 29.9% year-on-year.

Throughout 2023, BowFlex's performance was shrouded in shadow and continued to show a downward trend, and it did not reverse the downward trend until 2024.

BowFlex listed in its bankruptcy filing that the company had a total of $140 million in assets and $126 million in liabilities. The direct cause of the company's bankruptcy was the change in demand for fitness equipment in the post-epidemic era, and the economic environment also affected consumer purchasing power.

According to industry insiders, BowFlex has made many efforts to restore the company's performance:

Since the second half of 2021, the company has been seeking strategic partnerships and capital support.

And BowFlex has taken operational measures to control costs and optimize inventory.

In November 2023, BowFlex's parent company Nautilus also changed its company name to BowFlex, and also changed its stock code on the New York Stock Exchange from "NLS" to "BFX", hoping to attract more consumers with the identity of a "home fitness brand."

But in the end, BowFlex's operating conditions did not improve. According to industry insiders, there are two reasons why BowFlex went bankrupt:

First, BowFlex is too dependent on aerobic exercise products. More than 46% of the company's revenue comes from aerobic exercise products, and sales of this product fell 28.5% year-on-year in the first nine months of 2023.

Second, competition in the fitness equipment market is becoming increasingly fierce, and the brand’s user stickiness is still insufficient, making it very susceptible to fluctuations in market demand.

The acquirer behind BowFlex should not be underestimated

For an established company like BowFlex with sufficient capital and experience, it is quite a bargain to be acquired by Taiwan's Johnson Healthcare Group for US$37.5 million.

Johnson Health Technology Group is also a long-established fitness equipment company, founded in 1975 and headquartered in Taiwan, China. Its products cover professional commercial, light commercial and home fitness equipment, massage chairs, etc. The company owns multiple fitness equipment brands MATRIX, VISION, HORIZON, TEMPO and massage equipment brands FUJIIRYOKI and SYNCA, aiming to bring customers a variety of scientific sports and health solutions.

After years of development, Johnson Healthcare Group's business has expanded to more than 60 countries and regions around the world, with 42 subsidiaries, 5 R&D centers, and 6 production bases.

As early as 2003, Johnson & Johnson's stock was successfully listed (stock name: Johnson & Johnson Health, stock code: 1736-TW) .

In 2012, Johnson acquired the North American brand Magnum, and its revenue scale also saw rapid growth, making it one of the leaders in the industry.

In 2015, Johnson successfully acquired the North American professional fitness equipment chain store - 2nd Wind Exercise Equipment and Canadian commercial fitness equipment distributor Stak Fitness, becoming the world's first fitness equipment manufacturer to establish a marketing subsidiary in Canada.

In 2016, Johnson acquired eight fitness equipment retail stores under Busy Body in California, USA and Leisure Fitness, an American home fitness equipment store, and established a marketing subsidiary in Denmark.

In addition to focusing on the fitness field, Johnson is also actively expanding into other fields.

In 2020, Johnson acquired 60% of the shares of Japan's Fuji Medical Devices, officially expanding from the fitness field to the field of massage chairs and health aids, and also more deeply practicing Johnson's concept of creating health value.

Today, Johnson Health Technology Group has officially acquired BowFlex, and the company said the acquisition of BowFlex is aimed at "expanding the group's business." BowFlex has also obtained $25 million in debtor-in-possession financing, allowing the brand to continue normal operations.

In recent years, the market potential of fitness equipment has been continuously released, consumers' demand for fitness equipment has become more and more diversified, and the market size of fitness equipment is expanding rapidly.

According to GlobalMarketInsights data, the global fitness equipment market is expected to exceed US$25 billion by 2027 .

Although the fitness equipment market is developing in a positive direction, BowFlex's bankruptcy is also a warning to other companies. In the ever-changing market, it is necessary to adjust operating strategies in a timely manner and find more effective profit models.

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