NordicTrack CEO Exercises Positive Thinking : Sales: The company will need it. Studies show the fitness trend is slowing as baby boomers age. The stock of its parent firm, CML Group, has taken a hit as a result.

Jim Bostic admits he can sound like Norman Vincent Peale at times.

The walls of the NordicTrack president and CEO’s modest corner office are lined with framed quotations from George Patton, Henry Ford and Wayne Gretzky. One of his favorite sayings is: “Whether you think you can or can’t, you’re right.”

“We really believe this stuff,” Bostic says.

It may sound corny, but Bostic’s approach has worked since he joined the exercise equipment manufacturer eight years ago. Sales exploded from $20 million in 1987 to $456 million last year.

But NordicTrack will need to keep thinking positively. The market for exercise equipment has been slowing, and despite NordicTrack’s strong 1994 sales performance, its earnings fell below expectations.

The stock in its parent company, CML Group, has fallen more than 50% from its 52-week high of about $20 to its current level of about $9 a share.

Bostic, a grandfatherly, white-haired former auto industry executive, does have plenty of true believers on board, having surrounded himself with a cadre of executives who are youthful, hungry and energetic.

“Our product management people are so young that half of them look like you could buy them ponies for Christmas,” said Al Bistany, who heads customer satisfaction.

January and February are the most hectic months of the year at NordicTrack headquarters in this Twin Cities suburb, where 25,000 calls a day pour in from people around the country trying to make good on New Year’s resolutions to lose weight.

They inquire about such contraptions as the NordicFlex Gold strength trainer, StrengthAerobic Multi-Trainer and NordicTrack Walkfit treadmill. In all, NordicTrack has 54 models of exercise machines on the market.

The pride of the fleet remains the quirky NordicTrack cross-country skier. The machine simulates cross-country skiing with sliding skis and a resistance cord that is pulled back and forth with the arms in a motion that one writer said resembles exaggerated flossing. The machine has been spoofed in cartoons and on the cover of the New Yorker magazine.

When Ed Pauls invented the NordicTrack cross-country skier in the garage of his suburban Minneapolis home in 1976, people were afraid to try it because they didn’t want to look foolish or feared they’d fall off the awkward-looking exercise machine.

Pauls and his wife, Flo, solved that problem, starting a mail-order business that allowed people to buy the NordicTrack skier and exercise in the privacy of their homes. The business was bringing in $5 million in sales by 1986, the year NordicTrack was sold to CML of Acton, Mass., for $22.2 million.

CML also owns the Britches clothing chain, Nature Co. gift stores and Smith & Hawkins gardening suppliers.

NordicTrack officials are guarded about financial figures, but they acknowledge the cross-country skier still accounts for more than half of all company sales. The NordicTrack brand accounts for at least 90% of all sales of cross-country ski machines nationwide. The company has sold 2 million machines.

Invariably, NordicTrack executives refer to cross-country ski machines made by other companies as “cheap knockoffs.” Consumer Reports last September rated the NordicTrack Pro, priced at $600, as the top of the line among 13 cross-country machines it tested. Another magazine, Consumers Digest, said NordicTrack rules the market.

“A lot of people are passionate about this machine,” Bistany said.

Indeed, two employees at a company retail store got married last year on a NordicTrack. The company newsletter has a section called Love Letters featuring correspondence from happy customers.

One woman wrote recently that she was “decaying and ready for the grave” until she began working out on her NordicTrack.

Despite such adoration, CML, which derives about 80% of its earnings from NordicTrack, said in its annual report that earnings goals weren’t achieved because NordicTrack spent too much money on advertising.

It didn’t help matters last year when the Wall Street Journal reported the market for cross-country ski machines may be getting saturated as couch-potato baby boomers begin to age. CML stock plummeted 18% in one day after the report.

NordicTrack also had to fight a costly lawsuit brought by arch-rival Soloflex Inc., which sued NordicTrack for $25 million, claiming unfair competition and trademark infringement linked to the NordicFlex Gold machine. The companies settled last year for undisclosed terms, but CML took a $4-million fourth-quarter charge to cover legal costs.

Bostic, though, said NordicTrack will continue to thrive because it still believes in excellence, innovation and quality products and service.

NordicTrack said recently it’s branching into a new area--selling vitamin supplements. The decision seems like a logical move for a company that wants to become synonymous with wellness and health.