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Peloton Plummets as the Pandemic Puts Pause to Production
The company is spinning out of control
Peloton was once a company plagued with product shortages. Now, it’s a company plagued with too much inventory.
Much like the bikes of many of its customer base, Peloton products are sitting unused, gathering dust, though in this case on store shelves and in warehouses. According to internal documents obtained by CNBC, the inventory is so stocked that the company has paused production on most of its connected fitness products for the next two months. Certain products, like the more expensive Bike+, were already paused till summer, while the company doesn’t expect to make a single Tread + for the 2022 fiscal year.
The reason? Demand has faced a “significant reduction.” Or in other words, when people returned to normal life, most discovered that a Peloton bike would not be part of that lifestyle. The problem for Peloton is that it bet big on the wrong team, ramping up production through 2021 even as pandemic restrictions began to ease. A year ago, it acquired Precor, a fitness equipment manufacturer, to boost production and capacity. Then, just last May, it announced plans to spend $400 million on its first U.S.-based manufacturing facility. It’s increasingly apparent that the company should instead have been consolidating and…
