The pandemic coincided with a jump in Peloton sales, and that’s understandable.
The company’s smart ergometers may cost four figures, but they boast stylish design, unparalleled functionality and, last but not least, software that is not found in any of their competitors.
It is no coincidence that Peloton users are often defined as a specific sect dedicated to their virtual coaches, but this is clearly not enough to protect the brand from failure, and there is even speculation about who will buy it to save it from bankruptcy.
And that unfortunate first series of “Just like that …” is not even the only culprit.
In 2020, when the first lockdowns begin, Peloton fears that they will not be able to supply ergometers – they have so many orders.
Some customers wait more than two months to get their fitness equipment, although the cheapest version of the simulator comes at a price of 1850 dollars.
However, the beginning of 2021 is by no means rosy, as more and more complaints are beginning to emerge from Peloton’s wheels. The company’s finances have dwindled due to the construction of a new factory in Ohio and the purchase of a smaller sports brand called Precor.
At the same time, a number of users have reported accidents with another product Peloton – treadmills (priced at $ 4,200 each).
In March last year, a Denver family accused the device of killing their six-year-old child. With the news of the incident comes a total of 28 allegations of injuries to children, possibly caused by the brand’s treadmills.
In response, Peloton launches special software with instructions for use, but also explicitly warns that children and pets should stay away from the simulators. In any case, the value of the company collapses from 50 billion to 8 billion dollars.
–
–
–
–
Then comes the first episode of the sequel to “Sex and the City” – “Just like that”, in which a popular character gets a heart attack while training on a bike bike argometer of the brand. And this seems to trigger the “butterfly effect”.
At the heart of this mess, according to The Verge, is Peloton founder and CEO John Foley.
He is accused of refusing to cooperate with the American Consumer Association, of appointing his wife as vice president of the company, of misjudging consumer demand and of a complete failure in marketing.
After a series of calls for his resignation, Foley agreed to step down as CEO and take over as Peloton’s chief executive. In addition, he still owns 80 percent of the company’s shares and no deal can go without his approval.
As an official reason for his resignation, Foley did not point out the marketing failure and the inability to manage crisis PR, but the decline in sales of ergometers. In an open letter to his employees, he said that “post-kovid demand is different than expected” and therefore resigned as CEO.
–
–
–
–
However, the “butterfly effect” has a far more devastating effect, as Foley’s withdrawal comes with the news that 2,800 people have been fired. Peloton.
As compensation, former employees will receive a one-year subscription to Peloton products, as each of their users has their own paid account. As you might guess, this is equivalent to a free fitness card and even less, because in order to have a brand profile, you must also own one of its not very cheap devices.
Now the chance for those who remain in the company is to buy it from a larger company to save the sinking ship.
The Wall Street Journal has named names such as Apple, Amazon, Disney and Nike as potential buyers, but it is not known how much Foley is willing to sell and if not – whether he will be able to save his own creation.
–
–
–
–
–
