Exercise equipment maker iFIT Health & Fitness is facing a $300M lawsuit amid mounting challenges.
Pamplona Capital Management, an iFIT investor, is suing the company over a deal it made to acquire a Chinese manufacturing partner. Pamplona, who invested $200M into iFIT in 2019 and sits on the company’s board, filed the suit on January 18, according to the New York Post.
In the time since, the company has reportedly burned capital as sales of its home fitness equipment declined.
Now, as iFIT explores new financing options, the lawsuit threatens to push the company into bankruptcy.
Ups and downs. From record highs to problematic lows, fitness companies that thrived during the pandemic have hit a wall.
- Peloton. After rising more than 440% in 2020, Peloton’s stock has returned to its 2019 IPO level, trimming its market cap from nearly $50B to under $8B.
- Beachbody. Since its SPAC merger and acquisition of smart bike maker MYXfitness, shares of the digital fitness company have declined 80%.
- MIRROR. Initially projecting over $250M in revenue for its fitness device MIRROR, lululemon cut the equipment brand’s 2021 sales figure in half.
Hard reset. As we detailed in Issue No. 150, the habits and preferences of exercise seekers are in flux. With pandemic tailwinds waning and gyms reopening, connected fitness companies will have to retool in pursuit of sustainable growth.