Planet Fitness shares sink after board ousts CEO

Planet Fitness shares sink after board ousts CEO

Revealed: The Secrets our Clients Used to Earn $3 Billion

Chris Rondeau, CEO of Planet Fitness

Adam Jeffery|CNBC

In a relocation that stunned financiers and staff members alike, Planet Fitness ousted business veteran Chris Rondeau from his post as CEO, the exercise chain stated Friday in a news release.

The stock dropped 15% in the wake of the statement, striking a 52 week low.

Planet Fitness stated it is looking for its next chief both internally and externally. Craig Benson, the previous guv of New Hampshire and a member of the business’s board, will work as the interim CEO. He’s a franchisee of both Planet Fitness and Dunkin’ Donuts and has actually been on Planet’s board for 6 years.

Rondeau’s departure appears unexpected, and it’s unclear what activated the choice, particularly after a stronger-than-expected 2nd quarter incomes report last month. Some personnel near Rondeau learnt more about his departure around the time the news was revealed openly, leaving them surprised, according to an individual knowledgeable about the matter.

In a research study note, William Blair expert Sharon Zackfia called the news “abrupt” and stated it didn’t “appear planned” since the business canceled 2 scheduled financier conference discussions today.

“The decision was characterized as the board’s and not Rondeau’s,” Zackfia composed.

Planet Fitness decreased more remark. Rondeau could not be reached.

Rondeau is a long time veteran of the business, working his method up from a front desk position almost 30 years earlier at the health club’s very first place in Dover, New Hampshire, when it was owned by creators Michael and MarcGrondahl Rondeau has actually functioned as CEO considering that 2013 and formerly held the function of chief running officer. He will continue as a member since the board of directors and will remain on in an advisory function “to help ensure a smooth transition,” the business stated.

“My 30-year career at Planet Fitness has been an incredible ride, and it’s been an honor to lead this Company and serve our employees, franchisees and members, all of whom have played a key role in our tremendous growth and success,” Rondeau stated in a declaration. “I am grateful for and look forward to supporting the management team in an advisory capacity, and have confidence in the long-term potential of Planet Fitness.”

During his time as CEO, Rondeau led Planet Fitness’s IPO and tripled its club base from about 700 to about 2,400 areas. When he began in the position, the business was doing about $200 million in yearly profits and is now predicted to do more than $1 billion this year, Zackfia stated.

“As we enter the next chapter of Planet Fitness’ journey, the Board felt that now was the right time to transition leadership,” Planet Fitness Chairman Stephen SpinelliJr stated in a news release. “In today’s evolving environment, Planet Fitness is continuing to enhance our competitive advantage, capitalize on our size and scale, and drive further shareholder value.”

The business’s stock is down about 34% this year, offering it a market price of about $4.47 billion.

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