“Least weak” may be damning with faint praise, but for exercise and fitness marketer Nautilus Inc., the cross-training sneaker fits. During second-quarter 2009, revenue in all three of the company’s business segments were down from second-quarter 2008’s levels. But with a 31.7% falloff, direct revenue was the least changed.
Overall, the company’s sales declined from $95.6 million a year ago to $60.8 million, a 36.4% drop It took a $20.8 million loss during the most recent quarter, compared with an $8.9 million loss a year ago.
Direct sales dipped from $41.3 million to $28.2 million, while retail sales plunged 40.2%, from $19 million to $11.4 million. Commercial sales – a category that includes revenue from gyms and fitness centers – were off 39.7%, dropping from $34.4 million a year ago to $20.7 million.
The direct unit’s fortunes declined largely due to a tighter credit market, which restricted consumers’ ability to finance their Nautilus, Bowflex, Schwinn and Stairmaster products, according to the company. Retail sales were off due to store owners cutting back their inventory, according to the company.
The company has engaged Robert W. Baird & Co. to assist in evaluating strategic alternatives for this business, and expects its review process to last several months.
Why review the commercial sales unit and not the retail sales business, which had a near-identical drop? During the second half of the calendar year, “sales are seasonally stronger for our direct and retail consumer businesses,” chairman and CEO Edward Bramson said in a statement.
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