BowFlex Inc. (NYSE: BFX) filed for Chapter 11 bankruptcy protection last week, with a plan to sell the business for $37.5 million to Johnson Health Tech.
The Vancouver-based home fitness firm experienced a surge in demand during the COVID-19 pandemic, but the subsequent oversupply and market saturation led to financial difficulties.
Despite benefiting from the pandemic-driven exercise-at-home trend, BowFlex found itself grappling with excess inventory as demand slowed and retailers canceled orders. Intensified competition in the post-pandemic fitness equipment market and rising interest rates further exacerbated the company’s challenges.
Entering bankruptcy with $140 million in assets and $126 million in liabilities, BowFlex had previously taken measures to streamline operations, including laying off 15% of its workforce and selling the Nautilus brand for $10.5 million.
While Johnson Health Tech’s $37.5 million offer is on the table, BowFlex plans to conduct an auction to explore potential higher bids from other interested parties.
“We are fortified by the potential partnership with Johnson Health Tech and encouraged by the multiple parties that have indicated an interest in bidding for our Company. Our goal is to maximize value for our stakeholders through this process,” the company’s CEO Jim Barr said in a statement.
The company has secured a $9 million bankruptcy loan and restructured existing debt to facilitate its reorganization efforts.
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