Who knew there was a cap on people able to spare more than two thousand dollars for an exercise bike in the midst of a pandemic, in the midst of crippling increases in the cost of living? Apparently, it’s not the tech’s home fitness darling.
US fitness giant Peloton is now feeling the pinch, according to a report claiming the company has halted production following a “significant reduction” in demand for its bikes and treadmills.
CNBC spied an internal document from earlier this month citing increased industry competition and customer sensitivity to hardware prices, which come with a £40/$60 monthly subscription after purchase if you want access to training.
The report says the well-backed startup now has significantly more inventory than it currently transfers to consumers.
“Peloton essentially got the number of people who would buy its products wrong, after such demand was pushed during the coronavirus pandemic,” the report said. “He now finds himself with thousands of bikes and treadmills in warehouses or on cargo ships, and he needs to reset his stock levels.”
While production of Bike+ halted in December, according to internal documents, Peleton is also putting the brakes on its Tread+ treadmill. Production will cease for six weeks for the product already affected by a safety recall in 2021.
Given that the company is currently planning to start charging hefty delivery and installation fees starting at $250 in the US, the odds of a rebound in 2022 look less than rosy. The report also indicates that the Guiding Peloton is also struggling to capture public interest. Fewer people registered their email address to receive product updates than expected.
In November, the company announced the £450 Peloton Guide, which is essentially a camera for your TV that tracks your form for movement-based exercises like yoga. It plugs into any TV and combines with weights and a heart rate monitor. The camera tracks your movements and presents them on the TV, while showing the instructor, live stats and standings, including other participants.
Peloton shares fell more than 20% after the CNBC report was released.