You can log in to your Peloton account from the web and the Peloton mobile apps.
Ezra Shaw/Getty Images
- Peloton’s stock price has plummeted in the past 12 months.
- The high-tech fitness company was once the golden child of the connected fitness world.
- But slowing demand and product recalls have put pressure on its business.
Just under two years ago, Peloton was the toast of Wall Street. With consumers trapped at home and unable to visit gyms, demand for its high-tech fitness equipment soared.
Peloton slashed the price of its bike but the approach bore little fruit.
Michael Loccisano/Getty Images
But this is when its troubles began.
The company wasn’t ready to meet such high demand. Customers started to complain about months-long delivery times, last-minute cancellations, and poor customer service. These complaints went on for months, rolling into 2021.
In the meantime, Peloton purchased fitness manufacturer Precor for $420 million to ramp up production levels and cope with demand. But in the background, the market was becoming crowded with other at-home fitness options and competition was heating up.
In the spring of 2021, Peloton came under scrutiny of US regulators who warned customers not to use its Tread+ running machine following reports that a child had died and several others were injured while using it.
Peloton
The regulators urged Peloton to recall the product but it initially refused, describing the US Consumer Product Safety Commission’s warning as “inaccurate and misleading.”
Class-action lawsuits against the company trickled in from consumers and investors who said it had knowingly sold a defective product.
Peloton Tread+.
Peloton
A month later, Peloton recalled the item and CEO John Foley apologized for not engaging more productively with the CPSC.
The company told customers to stop using the treadmill immediately and apply for a refund. It also stopped the sale and distribution of the Tread+.
Regulators want Peloton to conduct a safety recall following reports of injuries on its new Tread+ treadmill.
AP Photo/Jeff Chiu
Foley later said that the US Department of Justice and the Department of Homeland Security had subpoenaed it for documents and other information related to its reporting of injuries associated with its products.
In June, Peloton faced fresh criticism from customers after it disabled the free “Just Run” feature on its Tread+, forcing some users to pay a $39 fee to use it.
Peloton
Peloton later brought this feature back.
As the year went on, competition in the market grew and consumers became more comfortable returning to gyms.
Thomas Barwick/Getty Images
As a result, Peloton’s revenue growth slowed. To entice new customers, it slashed the cost of its entry-level bike by $400 in August.
But revenue growth continued to slow into the next quarter.
You can log in to your Peloton account from the web and the Peloton mobile apps.
Ezra Shaw/Getty Images
In November, Peloton reported that sales of its connected fitness products fell by 17% in its first quarter fiscal 2022 results. The company also saw its smallest quarterly gain in connected fitness subscriber growth since the company went public in September 2019.
Peloton’s stock price tumbled, wiping out $8 billion in market value in one day, and stripping Foley of his billionaire status.
John Foley.
Courtesy of Comparably
Source: Insider
Reports then surfaced that the company had frozen hiring across all departments in order to cut costs.
Courtesy of Comparably
Source: Insider
The drama didn’t end there. In December, Peloton made its debut in the “Sex and the City” reboot, only not in the way it might have hoped.
Chris Noth riding a peloton in “And Just Like That…”
HBO Max
39 minutes into the first episode, Mr Big, (Chris Noth), Carrie’s on-again, off-again love interest-turned-husband, keeled over from a heart attack after unclipping from his Peloton bike, angering Peloton’s die-hard fans.
Peloton later confirmed in a comment to Insider that it wasn’t aware of the full scope of the storyline ahead of time.
The company was quick to respond and pacify upset users, releasing a new ad that featured Noth and made light of the episode.
Chris Noth attends the NY Premiere of ‘And Just Like That’ on December 08, 2021.
Gotham/GC Images
Peloton was praised for its cheeky response. But days later, the ad was hastily withdrawn after Noth faced allegations of sexual assault. Two women told The Hollywood Reporter that Noth had assaulted them in 2004 and in 2015, respectively. He denied these allegations.
The scandal didn’t end there. Just before Christmas, employees bashed Foley for hosting a lavish party at the Plaza Hotel in New York City, which was splashed around social media.
Peloton Co-Founder/CEO John Foley
Kimberly White/Getty Images for TechCrunch
Only select employees were invited to the party, and workers described it as “extremely opulent and tone deaf,” given the company’s rocky performance in recent months.
Peloton’s entrance into 2022 hasn’t been any smoother.
John Smith/VIEWpress
In leaked audio reported by Insider this month, execs discussed plans to lay off 41% of its sales and marketing teams and cut parts of its e-commerce and retail teams.
CNBC reported that the company hired management consultancy firm McKinsey to handle job cuts and restructurings.
This week, Peloton’s stock price took another battering after CNBC reported that leaked internal documents revealed that the company was pausing production of new bikes and treadmills because of weak demand.
Adam Weiss/Getty Images
Foley denied these reports and said the company was “right-sizing” production rather than halting it.
At the same time, reports emerged that the company was delaying the opening of its new $400 million Ohio factory by a year because of slowing demand. Peloton did not respond to Insider’s request for comment on this.
