The fitness equipment company behind a line of popular internet-connected devices with a local warehouse is halting production in a bid to reduce costs, according to a report.
An article published by financial news network CNBC Thursday said Peloton is “temporarily halting production” as consumer demand slows.
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The famed Peloton bikes will not be produced from February to March. A higher-end model had production halted in December and that will last through June, the report stated.
The company will pause production of its treadmill for six weeks starting in February and continuing through the rest of the fiscal year, according to CNBC, citing internal Peloton documents.
Peloton, which sells internet-connected workout equipment that isn’t cheap, saw sales jump during the pandemic as more people were home. However, sales have slowed and the company has faced a recall with its Tread Plus machines after several injuries and the death of a child.
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Technology news website The Verge reported CEO John Foley said last November the company had warehouses full of products.
“In the early days of the pandemic, Peloton’s biggest problem was its struggle to meet skyrocketing demand, resulting in months-long shipping delays that the company spent millions to address. Another issue is that Peloton went on a massive spending spree while things were going well. In December 2020, the company forked over $420 million to buy commercial fitness equipment maker Precor. It then spent another $400 million to build a factory in Ohio,” The Verge article stated.
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Throughout 2020, it wasn’t uncommon to see Peloton delivery trucks stopping at area homes or traversing local roads throughout the day.
Peloton stock dropped on the news Thursday.
Peloton stock went from $19.72 per share on March 13, 2020 to a high of $162.72 on December 24, 2020. As of late Thursday afternoon, the stock was just above $24 per share.
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Peloton operates a distribution location in a warehouse on Rittenhouse Circle in Bristol Township. Job postings recently showed the location continues to hire.
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