Peloton — a prized pandemic possession and the market’s white-hot spin bike company — has seen weak sales, leading to the threat of retail store closures, product price increases, and the appointment of consulting firm McKinsey for a financial and managerial cleanup.
Peloton, with headquarters in Hudson Yards at W34th Street and 9th Ave, gained notoriety during the initial COVID-19 shutdown when fitness fanatics otherwise used to frequenting the likes of Equinox turned to Peloton’s glossy, high-tech subscription platform and hardware for live spin classes. The passionate, almost cult-like enthusiasm for top Peloton instructors and the platform’s widespread camaraderie served as a vital cultural substitute for former gym rats desperate for community in the depths of quarantine. Stock rose 440% in 2020, and they seemed nearly unstoppable in the new era of Workout From Home.
As the pandemic dragged on, however, cracks began to show in the fitness empire’s foundation. Peloton’s new treadmill design caused a startling number of injuries and one fatality. A series of poorly received ads, ranging from 2019’s infamous Peloton Wife commercial to the misbegotten Mr. Big revival, further called the company’s storytelling and understanding of tone into question.
The latest blow came on the heels of positive news — the advent of vaccines in the spring of 2021 that led to the eventual reopening of local gyms. Delighted gym goers returned to their favorite businesses, recovering 51% of 2020’s foot traffic as Peloton’s subscriber base stalled, their stock dipping as much as 76% by the end of the year.
As Peloton flounders, considering the closing of over 15 retail stores and (according to anonymous employee statements to CNBC) possible widespread layoffs, local gym owners emphasize renewed interest in a hybrid workout experience. “The fitness businesses that will survive this pandemic will be the ones that allow for a hybrid experience that allows people to train at home, and in a studio setting when they want to leave their apartments. Working from home, eating at home and now working out at home is a bit too much to ask of any human long term — especially in NYC,” says Nate Feliciano, founder and CEO of Studio 16, an NYC gym with locations in Hell’s Kitchen, Flatiron, and Park Slope.
Feliciano contends that while Peloton initially attracted users eager to engage in their shiny, trendy, platform, the same consumer base is just as likely to move on quickly to the next fitness fad — “I believe what’s happening at Peloton is that they are targeting a younger market who will just switch to the next best thing when it becomes available, or just go back to the gym when things settle down,” says Feliciano.
In-studio gyms have the advantage over Peloton in that they serve a more age-inclusive and ultimately wider population, says Feliciano — “In 2020, only about 10% of Peloton users were 54 years old or older. The 54-and-over population is a huge market that Peloton is not serving yet.” In contrast, gyms like Studio 16 offer a wide variety of personalized training meant to provide fitness support to a broader community of athletes.
So while Peloton may need to do some serious soul searching (with the help of their pals at McKinsey) — for now, neighborhood gyms are still the go-to for a blend of familiar and cutting-edge workout experiences.