Peloton is pausing production of its connected bikes and treadmills. | Photo by Amelia Holowaty Krales / The Verge
Peloton’s pandemic fortunes began waning in 2021, and it appears that trend is continuing into the new year. According to a new CNBC report, Peloton has decided to temporarily halt production of its connected exercise bikes and treadmills amid weak consumer demand.
Citing a confidential internal company presentation, CNBC reports that Peloton will stop producing its original Bike from February to March. The company halted production on its more premium Bike Plus in December and apparently has no plans to restart until at least June. The newer Peloton Tread, which launched last year, will also cease production for six weeks starting next month. Unsurprisingly, Peloton also reportedly has no plans to produce any Tread Plus machines in fiscal 2022. The company stopped making new Tread Plus machines after the Consumer Product Safety Commission recalled the device following reports of several injuries, and in one instance, the death of a small child.
The woes also extend to the forthcoming Peloton Guide. Announced in November, the Guide was meant to be a $495 camera-based strength training system that connected with a user’s TV and came bundled with a heart-rate armband and a remote. However, CNBC cites internal documents showing the product hasn’t garnered a lot of interest thus far from consumers. While the Guide was expected to launch in early 2022, it appears that it may not launch until as late as April.
The Verge reached out to Peloton for comment but did not immediately receive a response.
The connected fitness company is purportedly halting production as it had overestimated consumer demand for its products and misjudged people’s desire to return to in-person fitness classes — a fact that CEO John Foley admitted during its last investor call in November. The result is warehouses full of Peloton products, and no sign of another at-home fitness craze starting up on the horizon. It’s an ironic twist of fate. In the early days of the pandemic, Peloton’s biggest problem was its struggle to meet skyrocketing demand, resulting in months-long shipping delays that the company spent millions to address. Another issue is that Peloton went on a massive spending spree while things were going well. In December 2020, the company forked over $420 million to buy commercial fitness equipment maker Precor. It then spent another $400 million to build a factory in Ohio.
It might be tempting to look at Peloton’s struggles as a bellwether for the entire connected fitness industry — and it’s undoubtedly true that many connected fitness equipment makers have followed Peloton’s playbook. However, connected fitness isn’t going anywhere. Experts believe that akin to remote work, people will likely adopt a hybrid model of working out both at home and in the gym. Peloton, while still the leader, is facing increased competition from rivals like Tonal, Echelon, Hydrow, and Mirror.
The bigger question is how Peloton adjusts to the new post-pandemic reality. Peloton’s next earnings call is scheduled for February 8th, but the results from last quarter were concerning. Although Peloton retained 92 percent of its yearly subscribers, it reported a net loss of $376 million. Attempts to slash $400 off the price of the original Peloton Bike in August didn’t seem to help bolster demand, either. A separate CNBC report from earlier this week also noted Peloton was working with a consulting firm to potentially cut jobs and “review its cost structure,” as well as add delivery and assembly fees for its bikes and treadmills.