First Up It Was Peloton CEO, Now Nordic Track CEO Has Been Dumped
What is it about high tech treadmills and exercise bikes? first up it was the CEO of Peloton who stepped down over poor results and questionable decision making, now the CEO of archrival NordicTrack has ‘agreed’ to step down with the business being described as being “a mess”.
The maker of NordicTrack exercise bikes and treadmills got a financial lifeline this month and it appears the backers are looking for fresh blood at the top to run the business going forward.
Investors insisted that 66-year-old Scott Watterson — a hard-charging billionaire who founded the company in 1977 after doing a stint as a Mormon missionary in Asia has been forced to relinquish control of the daily management of NordicTrack’s parent company, iFIT Health & Fitness weeks after Peloton CEO John Foley was forced to step down from running the Company.
IFIT’s new backers have demanded control of the board, which meant booting long time directors from the Church of Latter-day Saints who were close to Watterson from the board.
Like Peloton investors became concerned over costs which ballooned over the past year as Watterson scrambled to outgun archrival Peloton by pouring millions of dollars into a marketing push that tapped Olympic swimming legend Michael Phelps.
In Australia NordicTrack has increased their marketing and PR push in an effort to stop Peloton getting traction after they moved to roll out new stores and a new sales and marketing operation in Australia.
Watterson had planned to raise over $800M via an IPO to pay for the increased costs the business was splashing out on, the IPO was eventually scrapped.
Once valued at more than $10 billion, iFIT last year was forced to shed hundreds of workers in a series of layoffs in a bid to slow its cash burn as pandemic-driven demand for exercise bikes from NordicTrack and Peloton dried up as markets around the world moved back to normal after COVID.
It’s also been revealed that companies were bogged down in patent lawsuits against each other as well as other fitness companies.
One source close to the company now pegs iFIT’s market value closer to $1.5 billion.
“It needed a fresh set of eyes and for someone to manage the business professionally,” one source close to the company told The New York Post.
Investor have complained that Watterson ran iFIT like a fiefdom –according to one source, Scott has been known to “dress down his employees in front of the board of directors” — and he doled out plum gigs to 11 family members, according to public filings.
Questions are also being asked as to what will happen to Watterson’s 35-year-old son Mark, who is chief experience officer at the US Company.
The New York Post reported earlier this year that iFIT was facing potential bankruptcy this year due to a lawsuit from a Company who demanded immediate repayment of a 2019, $200 million loan and $100 million in interest, alleging that iFIT cut a deal to acquire a Chinese manufacturer.
The Company now claims that they settled the dispute without disclosing details.