Scott Watterson, co-founder of ICON, demonstrates one of the company’s high-tech ellipticals.
LOGAN – ICON Health & Fitness of Logan is well-positioned to weather the looming economic disruption threatened by the worldwide coronavirus outbreak, according to Colleen Logan, ICON’s vice-president for Marketing.
“We have an adequate inventory of finished products, components and parts to meet anticipated demand for six to eight months,” Logan explained, indicating that ICON executives don’t expect to have to curtail their manufacturing and sales operations for the foreseeable future.
The same cannot be said for numerous other U.S. and European enterprises.
Executives of those firms are bracing for the full impact of the coronavirus outbreak, which is expected to disrupt their supply chains and manufacturing operations starting in mid-March. Industry analysts expect that the most vulnerable firms will be those that rely most heavily on suppliers in China for parts, components and materials.
In recent years, international businesses have taken advantage of improvements in communication and transportation to reduce their need to pre-order massive on-hand inventories of component parts and materials. That change of practice resulted in corporate cost-savings, but left those firms unprepared to cope with any significant disruption in their supply-chain operations that might result from war, natural disaster or a pandemic.
According to a recent report from the business data clearinghouse Dun & Bradstreet, nearly 51,000 companies throughout the world have one or more direct suppliers in the Wuhan region of China, where the coronavirus first emerged. Those Chinese suppliers in turn have a vast network of regional subcontractors whose products are distributed to another 5 million corporate clients worldwide, including 938 of Fortune 1000 industry giants. The availability of components, parts and materials from those direct and indirect suppliers is expected to be severely curtailed by government quarantine efforts intended to limit the spread of coronavirus in mainland China.
But Logan said that the seasonal nature of ICON’s business has left the company in an ideal position to cope with any likely disruption of shipments from its Chinese suppliers.
“ICON’s season for heavy sales starts on Black Friday and runs through the winter months of December, January, February and March,” she explained. “After that, demand for our products slows down while fitness lovers exercise outdoors during the spring and summer months.
“Several months ago, ICON built up its inventory from all our suppliers to meet anticipated demand during the winter. But that demand was lower than expected due in part to a particularly mild winter in the Northeast. Given our remaining inventory of finished products, components and parts, it should be business as usual for ICON for the foreseeable future.”
Founded in the late 1970s, ICON has since grown into one of the fitness industry’s leading manufacturers of treadmills, stationary bikes and elliptical machines. The company markets products under the brand names NordicTrack, iFit, Pro-Form, FreeMotion, Weider, Weslo, Healthrider, UTS and Lotus.