Peloton needs a ride from Cody Rigsby to get out of its slump. A CNBC report says that the at-home exercise company that grew quickly during the first few days of the pandemic is going to stop making bikes and treadmills for a short time starting in February. Peloton’s stock fell 25% after that news came out. It closed at $24.22 a share, which means it lost all of its gains from the pandemic.
The company had the exact opposite problem last winter when it was scrambling to ship more bikes to meet the huge demand from gym rats who were trying to put together a workout that was “locked down” at the same time as their workout.
With some customers having to wait two months for their bikes, Peloton spent $420 million to buy the exercise equipment company Precor.
In May, Peloton said it would spend $400 million to build its first US factory in Ohio, which would be done in 2023.
But it didn’t take into account how many people wanted to get sweaty in their living rooms when they could get sweaty next to someone’s dad on an elliptical in the same room. The demand for Peloton’s products has gone down as gyms have reopened, customers don’t like the high prices, and new competitors have come into the market. Next thing you know, there were more Pelotons on Facebook Marketplace than in delivery vans.
This is how you zoom out: Peloton has been getting a lot of bad press lately, and now the company is taking a break from making bikes.
On Tuesday, CNBC said that consulting firm McKinsey was hired by Peloton to run the company’s costs through an HIIT class, which is a way to cut costs.
Some of the top executives at the home workout company have reportedly talked about laying off 41 percent of the sales and marketing teams, cutting back on underperformers in the e-commerce department, and closing down retail stores.
He died after having a heart attack after a Peloton workout in the new SATC reboot, and the product placement in the movie didn’t help him at all!
Looking at the next few years…
For the launch of Peloton Guide, a $495 strength training programme that would compete with Lululemon’s Mirror, Peloton will try to get people excited about it. If you bought this item last October, it might not arrive until April.