Nordictrack Hits Uphill Stage With Exercise Sales Peaking, Company’s Earnings Slow Down

Jim Bostic admits he can sound like Norman Vincent Peale at times.

The walls of the NordicTrack president and CEO’s modest corner office are lined with framed quotations from George Patton, Henry Ford and Wayne Gretzky. One of his favorite sayings is: “Whether you think you can or can’t, you’re right.”

“We really believe this stuff,” Bostic says.

It may sound corny, but Bostic’s approach has worked since he joined the exercise equipment manufacturer eight years ago. Sales exploded from $20 million in 1987 to $456 million last year.

But NordicTrack will need to keep thinking positively. The market for exercise equipment has been slowing, and despite NordicTrack’s strong 1994 sales performance, its earnings fell below expectations.

The stock in its parent company, CML Group, has fallen more than 50 percent from its 52-week high of about $20 to its current level of about $9 a share.

Bostic, a grandfatherly, whitehaired former auto industry executive, does have plenty of true believers on board, having surrounded himself with a cadre of executives who are youthful, hungry and energetic.

“Our product management people are so young that half of them look like you could buy them ponies for Christmas,” said Al Bistany, who heads customer satisfaction.

January and February are the most hectic months of the year at NordicTrack headquarters in this Twin Cities suburb, where 25,000 calls a day pour in from people around the country trying to make good on New Year’s resolutions to lose weight or exercise more.

They inquire about such contraptions as the NordicFlex Gold strength trainer, StrengthAerobic MultiTrainer and NordicTrack Walkfit treadmill. In all, NordicTrack has 54 models of exercise machines on the market.

The pride of the fleet remains the quirky NordicTrack cross-country skier. The machine simulates crosscountry skiing with sliding skis and a resistance cord that is pulled back and forth with the arms in a motion that one writer said resembles exaggerated flossing.

When Ed Pauls invented the NordicTrack cross-country skier in the garage of his suburban Minneapolis home in 1976, people were afraid to try it because they didn’t want to look foolish or feared they’d fall off the awkward-looking exercise machine.

Pauls and his wife Flo solved that problem, starting a mail-order business, which was bringing in $5 million in sales by 1986. That’s the year NordicTrack was sold to CML of Acton, Mass., for $22.2 million.

NordicTrack officials are guarded about financial figures, but they acknowledge the cross country skier still accounts for more than half of all company sales. The NordicTrack brand accounts for at least 90 percent of all sales of cross-country ski machines nationwide.

“A lot of people are passionate about this machine,” Bistany said.

Despite such adoration, CML, which derives about 80 percent of its earnings from NordicTrack, said in its annual report that earnings goals weren’t achieved.

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