Who knew there was a ceiling on people able to spare upwards of two-grand for an exercise bike in the middle of a pandemic, amid crippling cost of living increases? Not tech’s home fitness darling, apparently.
The American 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 has spied an internal document from earlier this month citing increased competition in the sector and customer sensitivity to the hardware prices, which are accompanied by a £40/$60 monthly subscription post-purchase, if you want access to the workouts.
The report says the well-backed start-up is now sitting on much more inventory than it is currently shifting to consumers.
“Peloton has essentially guessed wrong about how many people would be buying its products, after so much demand was pulled forward during the coronavirus pandemic,” the report says. “It’s now left with thousands of cycles and treadmills sitting in warehouses or on cargo ships, and it needs to reset its inventory levels.”
While the Bike+ production halted in December, according to the internal documents, Peleton is also putting the brakes on its Tread+ treadmill. Production will cease for six weeks for the product already hit by a safety recall in 2021.
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Given the company is currently planning to begin charging hefty delivery and set-up fees starting a $250 in the United States, the chances of a bounce back in 2022 appear to be less than rosy. The report also says that the Peloton Guide is also struggling to capture the interest of the public. Fewer people have registered their email address to receive updates on the product than anticipated.
Back 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 television set and combines with weights and a heart rate monitor. The camera follows your movements showcases them on the TV, while also showing the instructor, live stats and the leaderboard including fellow participants.
Peloton shares slumped more than 20% following the publication of the CNBC report.