Mark Wahlberg formed F45 in the same week that the fitness empire he co-founded took a major financial hit and announced that it had to fire 110 employees.
Wahlberg, who owns about 26 percent of the company, showed off his fitness in a video shared on Instagram Friday, bragging about the workout he just completed.
“Here in F45, Coeur d’Alene (Idaho, US), we just killed her, I tell you,” he told viewers.
I’m 51 [and] He said.
“F45, come and check it out.”
His promotional video came as the company announced that it was significantly scaling back its expansion plans “amid changing macroeconomic and business conditions.”
F45 co-founder Rob Deutsch said he “was never in his dreams” he could have imagined the sudden fall of the fitness empire he started in 2013.
The Australian gym behind what actor Wahlberg described as “the best workout on the planet” has received a huge hit in its global ambitions this week after it revealed that it has laid off 110 of its staff.
Adam Gilchrist, who shares the same name as the Australian cricketer and founded the company alongside Deutsch, also announced his resignation as CEO and Chairman of the company.
After planning to roll out 1,500 new franchises this year, the F45 will instead target between 350 and 450 and its projected revenue has fallen from $275 million to $130 million.
The announcement had a disastrous effect on the company’s stock, which plunged more than 60 percent on Wednesday (US time) to 79 cents.
It improved to $1.59 on Thursday afternoon but was still miles away from when it first floated on the New York Stock Exchange (NYSE) in July last year at $16.10 a share.
Stream more business news live and on-demand with Flash. More than 25 news channels in one place. New to Flash? Try 1 month for free. Offer ends on October 31, 2022
Deutsch, who resigned as the company’s CEO and sold his shares in 2020, was stunned by the developments.
“Never could have imagined this in my wildest dreams,” he wrote on Instagram. “When I got out, and sold off the F45, I left a healthy, cool commercial beast. All the way from the company culture to the heartbeat of the business…the trainings. The F45 was special.
“I really hope that all 110 laid-off employees will find happiness and opportunity elsewhere.”
Deutsche’s post received dozens of comments from F45 franchisees and loyal gym attendees that offered some insight into what contributed to the company’s collapse.
The former Sydney banker declared there were “enormous problems that need fixing” when asked if the F45 could turn back and appeared to agree with the Hawaii F45 coach who suggested the decision to go public with the company was a mistake.
The F45 franchise account in Canada also appears to claim that there were decisions made by the company during the Covid shutdowns that were “overwhelming”.
“We hope you’re still involved,” commented F45 Training Doon. “The decisions they made during the damaging shutdowns have been overwhelming for franchises. It’s amazing what the past couple of years have been like, especially if they open during the pandemic. Just absolute hell in Canada… I hope there is a positive turn.”
Deutsch replied, “I hope so, too.”
F45’s press release provided few details about where everything had gone wrong in the past 12 months, but noted that “market dynamics” are making it difficult for potential franchisees to get loans for the nearly $250,000 cost of setting up a gymnasium. athletic.
The company believes that a 45 percent workforce reduction will see a return to positive cash flow. But that’s a far cry from the bells and whistles that rang out to the public at the New York Stock Exchange last year, rapid early growth that Deutsch said was faster than franchises like McDonald’s and Subway in Australia.
The F45 was founded in 2013 and has grown rapidly in popularity for offering what it calls a 45-minute functional workout.
The company’s move to the New York Stock Exchange made headlines in July of last year, reportedly making Gilchrist about $500 million overnight.
Hollywood star investor Mark Wahlberg also saw similar windfalls at the time, but sold 1.1 million of his shares in March and April for US$12.2 million (A$17.45 million), according to AFR.
“You want to be there with the energy of the people who work with you, by your side, inspiring, pushing and supporting you,” Wahlberg told CNBC before the company debuted on the US market.