In a filing with the SEC on June 1, Icon Health & Fitness has announced it had hired a management group to advise it on how to dispose of its NordicTrack retail stores based on a recent management review of the company's business strategies and operations.
Icon, based in Logan, Utah, reported it had 67 stores that DJM Asset Management would help it market for sublease, assignment or otherwise discontinue. Icon expects to close all retail stores by June 30, Colleen Logan, Icon vice president of marketing, told SNEWS®.
"NordicTrack is very strong and profitable as a fitness equipment and fitness apparel brand," Logan said. "We just found it too unprofitable to continue to run our retail operation of 67 stores."
The NordicTrack retail division headquarters, based in Salt Lake City, employed 15 people, who have been laid off. "Nationwide, once the stores close, about 200 people will be laid off," Logan said.
The SEC filing said that the company "is unable in good faith to make a determination of the costs associated with discontinuing its retail store operations or an estimate of the amount or the range of amounts expected to be incurred in connection with discontinuing its retail store operations or the amount or the range of amounts of charges that will result in future cash expenditures." It said it expected to file an amendment in four business days with those estimates.
Logan said the inventory at the stores will be sold mostly through clearance sales now advertised or through NordicTrack.com. However, the NordicTrack line of clothing will continue to be sold at Sears and online, as will the NordicTrack equipment.
Icon purchased the NordicTrack brand and assets in a 1999 court auction after NordicTrack, known for its indoor cross-country ski simulators, filed for bankruptcy in 1998.
SNEWS® View: We can't blame Icon for closing these stores. For a relatively niche operation and line of product, it would indeed be tough to make ends meet in today's retail landscape. That holds especially true when a company is paying high-end lease prices at the types of malls where most NordicTrack stores operated. Since the name is still a brand -- one of the few -- that has some recognition among consumers, it will be easy to continue it through Icon's other channels since consumers now realize the name means more than wood cross-country ski simulators. That was a purpose served well by the stores in past years and developed well by Icon over its seven-plus years of ownership.