January 30, 1998

NordicTrack Retreats From DRTV Marketing

Exercise equipment manufacturer NordicTrack Inc., Chaska, MN, announced Jan. 29 that it would restructure its direct response marketing programs and focus more on retail sales channels. The company said it would immediately cut 51 full-time employees and 65 part-time telemarketing representatives from its Chaska headquarters to eliminate direct response channel overheard. It intends to outsource direct response operations to other manufacturers and vendors, said spokesman Michael S. Smith. "Direct response marketing is not as efficient in reaching customers because of skyrocketing advertising rates, changing television viewer buying habits and an infusion of 'fad' fitness products," the company said. NordicTrack parent company CML Group Inc., Acton, MA, posted a loss of $13.6 million for the 13 weeks ended Nov. 1, the most recently reported period. CML expected results for the following quarter to be hurt by NordicTrack's "slower-than-expected ramp-up" of an exercise device called the New Ellipse.