Fitness app SWEAT has gone into an $80 million loss in its first year under foreign ownership after being sold by South Australian fitness trainer, Kayla Itsines, in 2021.
Itsines, alongside ex-fiance Tobi Pearce, sold the global health and fitness app to US-based tech giant, iFIT, in July 2021 for $400 million.
Itsines and Pearce continued in their existing roles at SWEAT with the company headquarters remaining in Adelaide, SA.
The pair became globally recognised when their workout e-book, Bikini-body Guide, shot to popularity in 2014 and soon after SWEAT was launched in 2015.
At the time of selling the fitness app to iFIT, based in north Salt Lake City in Utah, it had been downloaded more than 30 million times and generated $99.5 million in revenue.
SWEAT was booming when gyms and sports centers were closed during the COVID-19 pandemic, due to offering home workouts and fitness programs globally. However, as COVID-19 restrictions eased and people were heading back to the gym, SWEAT has faced a decline in revenue.
SWEAT reported an $85 million loss in the 11 months to May 2021.
According to The Advertiser, Itsines announced in November that more than 30 staff would be laid off at SWEAT’s headquarters in Adelaide, reducing the numbers from 100 when it was at its peak in 2021.
A SWEAT spokesperson said the company had been “repositioned and right-sized” to cater to customers who were increasingly combining home workouts with in-gym exercise.
“The decrease in revenue is due to increased competition in the market and follows the same trend as the major players in the digital fitness industry,” the spokesperson told The Australian.
“In addition, there is no indication the future operating cashflows of the business will be negative for the next period based on management’s best estimate.”
According to financial statements, iFIT have paid out Itsines and Pearce $119.6 million in cash, shares and incentive-based payments to date.
The Greek Australian fitness trainer remains the face of SWEAT and is involved in the business. The SWEAT app was sold with the promise of continual investment in the brand, training content, and the brand’s online presence in key international markets.
Source: The Australian.
