F45 founder Rob Deutsch says there are ‘enormous issues’ with cult gym after stock market plunge
F45 co-founder Rob Deutsch has admitted there are “huge problems” plaguing the cult gym franchise after it suffered a stock market “collapse” with shares plummeting more than 60 percent.
Mr Deutsch took to Instagram on Thursday to share his shock after learning that the company’s stock price had fallen 61.5 percent.
The plunge prompted its CEO Adam Gilchrist, not to be confused with the Australian cricketing giant, to resign and the gym announced that 45 percent of its staff will be laid off – and 110 workers will be laid off.
Mr Deutsch’s Instagram post sparked an outpouring of grief from beloved F45 members, with many wondering if the gym could recover.
‘Do you believe that new leadership will lift F45 out of this ‘low’? I love the brand,” one member wrote.
Mr Deutsch responded with a startling admission claiming that the gym had to do a lot of work to regain lost ground.
F45 co-founder Rob Deutsch (right) claims the gym is in ‘huge problems’ after it suffered a stock market ‘collapse’ with stocks plummeting more than 60 percent
Mark Wahlberg (pictured center, with David and Candace Warner) was the company’s second-largest shareholder, but managed to sell 1.1 million of his F45 shares in March and April, earning him $17.46. million ($12.2 million dollars).
Mr Deutsch took to Instagram on Thursday to share his shock after learning that the company’s stock price had fallen 61.5 percent
‘I can’t speculate, but there are those that I am [sic] huge problems need to be solved first,” he wrote.
In his Instagram post, Mr Deutsch, who stepped down as CEO and sold his shares in 2020, said he could never have foreseen what would happen to his beloved gym.
“Never in my wildest dreams could I have imagined this,” he wrote.
“When I left and sold F45, I left a healthy, phenomenal, beast of a company.
‘From the company culture to the heartbeat of the company… The training courses. F45 was special.’
Mr Deutsch shared his condolences to the staff who would be made redundant after the stock market downturn.
“First of all – thank you to the legends who reached out!” He wrote.
‘Secondly, I sincerely hope that all 110 laid-off employees find their happiness and opportunities elsewhere.
“For those OGs, I want to personally thank you for your blood, sweat and tears. You are the reason why F45 was special. Time has proven that.”
Mr Deutsch’s Instagram post sparked a torrent of grief from beloved F45 members, with many wondering if the gym could recover
F45 announced on Wednesday that Mr. Gilchrist has stepped down as chairman and CEO with immediate effect after the company’s stock price fell 61.5 percent.
The New York Stock Exchange listed the company’s stock opening at $5.02 ($US3.51), but the stock price fell to $1.93 ($US1.35) following the shock announcement.
F45 garnered cult following for its 45-minute functional group workouts that combined resistance, metabolic and cardio movements in a fun and accessible environment.
When action star Mark Wahlberg attributed his impressive physique to F45 training, gym goers around the world were intrigued.
The Daddy’s Home actor regularly promoted the franchise on social media and hosted a number of Instagram Live workouts for his fans and 19.2 million followers.
The company’s stock price plunged a whopping 61.54 percent from $5.02 ($3.51) to $1.93 ($1.35) on Wednesday.
F45 has faced a stock market collapse with the company announcing that founder and CEO Adam Gilchrist would step down as chairman (photo, Mark Wahlberg (L) and Adam Gilchrist (R) on the New York Stock Exchange’s trading floor on 15 July 2021 )
The fitness franchise has been endorsed by other high-profile celebrities, including Mario Lopez, David Beckham, J Balvin, Steve Aoki, Magic Johnson, Greg Norman and Cindy Crawford.
The outgoing chairman, Mr. Gilchrest, said he was “forever grateful” to the franchise and thanked employees, investors and members for their support.
“To the staff who have worked tirelessly since our inception, you have been incredible in your efforts and I thank you for all your support,” Mr Gilchrist said in a statement.
“To the investors who have accompanied us on our journey, thank you for your commitment to F45.
Mr. Gilchrist has an extensive real estate portfolio, including a $18.9 million beach path in Byron Bay, next to Wategos Beach, with six bedrooms, four bathrooms and a swimming pool
International football legend David Beckham (pictured) joined the company last year
“Finally, I’m eternally grateful to our franchisees who deliver the world’s best workout every day to F45 members around the world.”
Mr. Gilchrist will receive more than $10.1 million, including 12 months of rent for his Florida mansion and 18 months of health insurance for his family, despite the company’s stock price crash.
He also owns a $14 million home in Sydney’s Freshwater, on the Northern Beaches, and a $18.8 million mansion in Byron Bay a stone’s throw from Wategos Beach.
Wahlberg sold 1.1 million of his F45 shares in March and April, earning him $17.46 million ($12.2 million).
Even before Wednesday’s plunge, F45 stock had fallen sharply since it went public on July 15 last year with an initial bid of $22.89 a share.
The company said the change in macroeconomics — national production, unemployment rates and inflation — has forced a restructuring of the company.
David Beckham (pictured) is another F45 fan, becoming a ‘global partner’ in 2021
Mr. Gilchrist’s colonial-style home broke the Byron Bay sales record previously owned by the same home when it sold for $15.7 million in 2006
F45 confirmed it would lay off nearly 45 percent of the company’s staff (110 employees) to cut sales, general and administrative expenses.
“We are taking the necessary steps to properly size our business in the face of evolving macroeconomic and business conditions,” explains Chief Financial Officer Chris Payne.
“While we expect growth to continue, market dynamics are having a greater-than-expected effect on franchisees’ ability to raise capital to develop new F45 locations.
“In addition, recent price movements have made it difficult for franchisees to make use of the financing facilities announced earlier this year.”
Daily Mail Australia contacted F45 for comment.
F45 garnered cult following after high-profile celebrities endorsed the franchise’s training regimens. The Daddy’s Home actor (pictured) regularly promotes F45 to his 19.2 million Instagram followers