StairMaster is taking another step toward its sale and possible dismantling, while several name fitness companies are hovering over the Seattle, Wash.-area equipment business.
The company, which filed for Ch. 11 bankruptcy protection in late August, issued layoff notices this month, as required by law, to all 360 employees in both its Kirkland and Bothell, Wash. offices as well as those in its manufacturing and distribution facility in Tulsa, Okla. Depending on the outcome of a January sale, all or some of those employees might actually continue working for the new owner, StairMaster attorney Fred Corbit told SNEWS.
And deadlines are nearing for possible bidders and the sale of the privately held firm. Initial bids, which could determine the "stalking horse" bidder, are due by Dec. 3 at 5 p.m. However, if a company doesn't wish to disclose its interest or the money it's willing to pay, it may also wait until Jan. 7 when "competing bids" are due, Corbit said.
"It may be that people will want to hold their cards close to their chest," Corbit said, speculating that even an interested company may choose to wait until Jan. 7.
Corbit said that "several" companies are looking at StairMaster financial records to determine their interest and their bids, including some "involved" with the Schwinn Fitness auction, as Corbit said, although he declined to disclose names.
However, Direct Focus President Kevin Lamar had already told SNEWS that it is assessing StairMaster's financial worth. Direct Focus won Schwinn Fitness in a September court auction.
"There is some value" in the StairMaster company, Lamar said. "We're looking at acquisition opportunities all the time, (but) we don't make it a corporate policy to talk about acquisitions. There are opportunities that float across our desk weekly."
In mid-November, Life Fitness President Kevin Grodzki told SNEWS he thought the StairMaster name had value and confirmed that Life Fitness was interested in that category, but offered only a "no comment" on specifics of the company's interest.
Depending on bids submitted either by Dec. 3 or Jan. 7, Corbit said the highest and best bid is scheduled to be determined at his offices in Seattle on Jan. 10. On Jan. 14, he would submit the accepted bid for approval to Judge Thomas T. Glover in the U.S. Bankruptcy Court, Western District, Seattle. Glover would then make his ruling on the bid, which could mean a new owner for StairMaster would be named at that time.
Until the process is complete, Corbit also pointed out StairMaster is "operating as on ongoing business" in Ch. 11 with adequate debtor-in-possession (DIP) financing.
"It is operating with a line of credit," he said. "It's operating. Its employees are there. It's producing product, and it's selling product. It's there."
StairMaster management has renamed mostly mum on the entire proceedings. In a Seattle Times story Nov. 27, Michael Quinn, president and CEO, said he hoped a buyer would emerge to continue the company and re-hire its employees.
SNEWS View: Although the StairMaster product has lost much of its must-have appeal with the influx of other companies in the category as well as the rise of the elliptical, the StairMaster name is ingrained in fitness-dom. If the price is right, what company wouldn't want to own that piece of history and the steppers --- still popular home equipment -- that goes with it? Direct Focus? Hm, that company does tend to have an interest in "names" that it can build on: Nautilus for strength equipment, then Schwinn Fitness, acquired in September, for cardiovascular equipment. Bowflex of course in the direct-to-consumer market is also a name. Or at least those chiseled bods on the commercials keep people talking. Adding StairMaster to the portfolio for a likely bargain price might just wrap up the Direct Focus portfolio of companies quite nicely.