IFit Health & Fitness announced a capital raise and said its co-founder, chairman, and long-time CEO Scott Watterson would step down from direct management of the company but remain chairman. Steve Barr, chief financial officer, and Mark Watterson, chief experience officer, were appointed co-presidents of the organization.
In a statement, IFit said Watterson’s shift to the role as chairman was planned. He has been chairman and CEO of IFit, formerly ICON Health & Fitness, since 1988. As chairman, Watterson will work with its advanced development team to focus on next-generation product innovation.
The changes come as IFit announced that it raised $355 million in a funding round led by private equity firm L Catterton. IFit said the capital raise would enable more focus and investment in growing its brands, content library and product offerings. At the same time, the company will also invest in efficiency measures to increase profitability for reinvestment.
As part of today’s announcement, the company has also amicably resolved its outstanding litigation matter with one of its shareholders.
IFit said it now has a community of over 7.3 million members across more than 120 countries, with increasing member participation in workouts and events.
“I am proud of what we have built at IFit over four decades and our ability to successfully adapt in a rapidly evolving health and fitness landscape,” said Watterson. “Today’s important updates strongly focus the business for continued growth in what has made us successful in the first place—technology, innovation and the member experience. I look forward to lending my expertise in driving innovation as Chairman. I am personally investing, alongside L Catterton, one of the world’s most successful health and wellness investors, in this capital raise. Moreover, I am excited to transition my executive responsibilities to Mark and Steve, who I am confident are well-suited to continue IFit’s long history of success.”
“It has been a privilege to learn from Scott, and we are excited about the next phase of IFit’s journey,” said Watterson and Barr. “Following today’s news, the company is on strong financial footing and stands ready to capture the enormous opportunity ahead of us. We remain focused on streamlining our overall business while, at the same time, investing in and enhancing the member experience and continuing to innovate across interactive software, content and hardware. There is nothing more important to us than delivering an unmatched member experience with the most advanced equipment and engagement to drive superior results for our members.”
Marc Magliacano, a managing partner in L Catterton’s Flagship Fund, said, “We are honored to invest and to play a meaningful role in the advancement of IFit’s future. The IFit member proposition remains superior to competitive offerings, and with the new capital raise combined with our partnership, we believe the best of IFit is yet to come. The company has the only integrated solution that offers leading product brands (NordicTrack, Proform) and content platforms (IFit, Sweat) that transcend venues, channels, product categories, and geographies. IFit is an integrated fitness platform that is positioned to win on a global scale, and we look forward to being a part of it.”
Monday’s moves follow IFit’s indefinite delay of an IPO this past October with the postponement blamed on “adverse market conditions.” The delay comes amid challenges faced by Peloton and signs from other vendors of a slowdown in demand for home fitness following an initial surge during pandemic-driven lockdowns.
As first reported on January 26 by the New York Post, the maker of NordicTrack exercise bikes was hit by a $300 million lawsuit that threatened to force the company into bankruptcy. The suit was filed by hedge fund Pamplona Capital Management, which lent IFit $200 million in 2019. According to court documents, Pamplona’s lawsuit sought to take back the original loan, plus $100 million in interest. It reportedly stemmed from a dispute with the top shareholder over IFit’s acquisition of an unnamed Chinese manufacturing company. As noted in Monday’s press release, the litigation was amicably resolved.
This past Friday, The Salt Lake City Tribune reported that IFit had launched another round of layoffs to reduce expenses amid supply chain challenges, particularly in securing steel, resins and microchips needed to manufacture its connected fitness equipment. The company announced a separate round of layoffs in December.
Photo courtesy iFit
