The company is pausing production.
The photo was taken by Amelia Krales.
The fortunes of Peloton began to decline in the new year. According to a new CNBC report, Peloton has decided to temporarily halt production of its connected exercise bikes and treadmills.
CNBC reports that the company will stop making its original bike in February and March. The company stopped production of its more premium Bike Plus in December and has no plans to resume it until at least June. The newer Peloton Tread will stop production for six weeks next month. Peloton has no plans to make any Tread Plus machines in fiscal 2022. The company stopped making new machines after the Consumer Product Safety Commission recalled the device following reports of several injuries and the death of a small child.
The upcoming guide also has some problems. The Guide was supposed to be a $495 camera-based strength training system that connected with a user's TV and came with a heart-rate armband and a remote. According to internal documents, the product hasn't gotten a lot of interest from consumers. The Guide was supposed to launch in early 2022, but it may not launch until April.
The Verge reached out to Peloton but did not get a response.
The CEO of the connected fitness company admitted during his last investor call that the company overstated consumer demand for its products and underestimated people's desire to return to in-person fitness classes. There is no sign of another at- home fitness craze because of the warehouses full of Peloton products. It is an ironic twist of fate. In the early days of the Pandemic, the biggest problem for the company was its inability to meet demand, which resulted in months-long shipping delays. Things were going well when Peloton went on a spending spree. Precor was bought by the company for $420 million in December 2020. It spent another $400 million to build a factory.
It is true that many connected fitness equipment makers have followed the example of Peloton, and it is tempting to look at the struggles as a bellwether for the entire connected fitness industry. Connected fitness is not going away. People will likely use a hybrid model of working out at home and in the gym, similar to remote work, according to experts. The leader, Peloton, is facing increased competition from rivals.
The big question is how Peloton will adjust to the new reality. The results from the last quarter were not good and the next earnings call is scheduled for February 8th. The company 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. A separate CNBC report from earlier this week noted that 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.