The last few years have been a roller coaster for Peloton. The company has been confronted with a significant reduction in its connected fitness products, including a series of treadmills and bikes.
The production of its entry-level bike will be stopped for two months in February and March according to internal documents. According to the documents, the premium Bike+ has already been halted and production will restart in June. The Tread production will be paused for six weeks in February, while the Tread+ won't be produced in the fiscal year that ends in 2022.
Gyms across the globe closed down during the Pandemic, and Peloton was one of the biggest tech winners. It was initially faced with a delivery system that simply couldn't meet the sudden demand for its products. In May of last year, it was announced that it was going to build a $400 million factory in Ohio.
The company has long been a leader in connected home fitness, and by most accounts viewed Covid-19 as more of a paradigm shift than a shift in how people work out. As the pandemic has continued to stretch on, it has seen a decline in the number of people going to the gym and a rise in competition through startups and big names. The company hired McKinsey in a bid to stem some of the financial bleeding, but it is expected to result in a restructuring and job loss. The stock of the Peloton plummeted by the end of the year.
The past few years have seen controversy, most notably a recall of its treadmill products over safety concerns. The company was hesitant to work with the Consumer Product Safety Commission after 70 safety incidents, including the death of a young child.
The framing of the category wasn't good enough for me. The category thought of as safety wasn't good enough according to the CEO. From a hardware perspective, they are the best designed treads. We learned that we need to be better when it comes to safety. We need to be better in safety because we are better in almost everything.
The company attracted a cult-like following thanks to its popular instructors and content plays. It is safe to say that it overestimation its growth and spending, at least for the short term. The Peloton Guide, a $495 connected strength system, was announced late last year. A rowing machine was in the works.
No word on how today's news would affect the arrival of either, though significant restructuring at the company would almost certainly find it doing everything within its power to curb spending. The company's competitors have undergone their own changes as well. The departure of the company's founder last September led to the appointment of a new CEO.
We reached out to Peloton to confirm the report.
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