Planet Fitness, a popular workout chain, shocked investors and employees with the sudden ousting of CEO Chris Rondeau, according to a press release on Friday. The company’s stock plummeted 15% following the announcement, reaching a 52-week low.
Planet Fitness has stated that it is currently searching for both internal and external candidates to fill the CEO position. In the meantime, Craig Benson, former New Hampshire governor and a member of the company’s board, will serve as the interim CEO. Benson, a franchisee of Planet Fitness and Dunkin’ Donuts, has been on Planet’s board for six years.
The decision to remove Rondeau from his position as CEO appears abrupt, leaving many to speculate about the cause. Rondeau’s departure came as a surprise to staff members who learned of the news at the same time as the public announcement, according to a source familiar with the matter.
Analysts have also noted the unexpected nature of the decision, as the company had recently reported stronger-than-expected earnings for the second quarter. The cancellation of two planned investor conference presentations this week further added to the surprise.
Rondeau, a longtime veteran of the company, started his career at Planet Fitness almost 30 years ago in a front desk position at the gym’s first location in Dover, New Hampshire. Since becoming CEO in 2013, he has led the company through an initial public offering and tripled the number of club locations from around 700 to approximately 2,400. Revenue has grown from $200 million annually to an estimated $1 billion for this year.
Rondeau will continue to serve as a member of the board of directors and will provide advisory support to ensure a smooth transition. Planet Fitness Chairman Stephen Spinelli Jr. expressed confidence in the company’s future, stating that the board saw now as the right time for a leadership change.
The company’s stock has declined by approximately 34% this year, resulting in a market value of around $4.47 billion.
Sources:
– Planet Fitness Press Release
– CNBC Article