In a move that stunned investors and employees alike, Planet Fitness ousted company veteran Chris Rondeau from his post as CEO, the workout chain said Friday in a press release.
The stock dropped 15% in the wake of the announcement, hitting a 52 week low.
Planet Fitness said it is searching for its next chief both internally and externally. Craig Benson, a member of the company’s board, will serve as the interim CEO.
Rondeau’s departure appears sudden, and it’s not clear what triggered the decision, especially after a stronger-than-expected second quarter earnings report last month. Some staff close to Rondeau learned about his departure around the time the news was announced publicly, leaving them shocked, according to a person familiar with the matter.
Rondeau has been with the company for decades. He has served as CEO since 2013. He will continue as a member as of the board of directors and will be nominated for re-election in 2024. Rondeau will also serve in an advisory role as part of the transition.
Prior to his post as CEO, Rondeau worked as the company’s operating chief. In 1993, he worked at the front desk of the chain’s first location in Dover, New Hampshire, which was owned by founders Michael and Marc Grondahl. Since being founded in 1992, the chain has grown to over 2,400 locations.
“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 Spinelli Jr. said in a press 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 company’s stock is down about 34% this year, giving it a market value of about $4.47 billion.