The sun sets on the CML Group Feb 1, 1999 12:00 PM
, Shannon Oberndorf
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Just four years ago, the CML Group's empire included cataloger/retailers
The Nature Co., Smith & Hawken, and NordicTrack. But on Dec. 17, the Acton,
MA-based company filed for Chapter 11 bankruptcy protection and said it
would sell its lone remaining property, gardening supplies marketer Smith &
Hawken. In late November, the CML Group had sold its NordicTrack athletic
equipment division to manufacturer/ cataloger Icon Health & Fitness for $12
million; in 1996, it had sold The Nature Co. and its Britches of
Georgetowne apparel retail chain.
The bankruptcy filing doesn't surprise industry observers, given that the
CML Group hasn't reported an annual profit since 1994. For the year ended
July 1998, the CML Group lost $127.4 million on sales of $274.4 million; it
had shut NordicTrack's catalog earlier in the year in hopes of cutting its
losses. NordicTrack was responsible for most of the red ink-sales plunged
30% last year alone, as the brand's once-hot flagship product, an exercise
machine that mimics the motions of cross-country skiing, grew snow-cold.
But $750 million Icon believes that it can revive the brand. "NordicTrack
is a great investment for us, given its well-known and respected brand
name," says spokeswoman Nicole Griffin. The Logan, UT-based company owns
eight other fitness equipment brands and had been the exclusive
manufacturer of NordicTrack equipment since 1996. Icon also owns the
Workout Warehouse fitness equipment catalog, which will begin selling
NordicTrack treadmills in the spring. "It's still too early to tell if
we'll mail a separate NordicTrack catalog," Griffin says.
The bargain-basement price that Icon paid for NordicTrack attests to the
division's ebb in fortunes. And unhappily for the CML Group, "the money
from the NordicTrack sale won't produce enough cash to keep it in
business," says Nick Holland, a principal in Boston investment firm Ulin &
Holland. "At this point, it's a matter of liquidating the company on the
best possible terms."
And that entails selling off Smith & Hawken, which last year reported net
profit of $2.8 million on $88 million in revenue. One industry source says
that in the past six months at least five companies had inquired about
buying Smith & Hawken. As of late December, the CML Group expected to
settle on a buyer by the end of January.
