Topline
Peloton raised the price of its monthly subscription as it lowered the cost of its equipment, the company announced Thursday, after a difficult year for the in-home exercise company that saw its stock price plunge, thousands of job losses and the installment of a new CEO.
Cari Gundee rides her Peloton exercise bike at her home on April 06, 2020 in San Anselmo, … [+]
Key Facts
Starting June 1, prices for Peloton’s monthly all-access membership will increase from $39 to $44 a month in the U.S, the first time Peloton has raised its membership cost in eight years.
The starting price of bikes were lowered to $1,445 from $1,745, including a $250 delivery fee, while the starting price of treadmills decreased to $2,695 from $2,845, including a $350 delivery fee, a “strategic decision” to “play for scale,” so more people could afford the equipment, the company said.
The membership price for Peloton’s app, for customers who do not own equipment, is staying at $12.99 a month.
Peloton’s stock dipped over 4% Thursday afternoon as the price change was announced.
Key Background
Though Peloton’s sales surged at the start of the pandemic, when gyms shuttered and in-home, remotely taught workouts became key to maintaining a sense of normalcy, the company has struggled to keep that success as restrictions lifted and people returned to in-person exercising. In January, it was reported that the company temporarily stopped producing its bikes and treadmills after a “significant reduction” for demand of its products worldwide. CEO and co-founder John Foley stepped down from his post in February and was replaced by Barry McCarthy, and the company cut roughly 2,800 jobs, including 20% of its corporate workforce. Stocks continued to fall that month when a temporary outage hit its bikes and treadmills, leaving customers unable to take classes. That month, McCarthy called the possibility of a sale unlikely. But in a presentation to the company yesterday, activist investor Blackwells Capital urged Peloton to consider a sale, according to CNBC and the Wall Street Journal, something it has been pushing for some time.
Tangent
Peloton garnered headlines in December after it was featured in the Sex And The City reboot, And Just Like That. Carrie Bradshaw’s longtime love, Mr. Big, died from a heart attack after riding the bike in the series’ premiere episode. Peloton said it was unaware of how its product was going to be used in the show, and quickly whipped up an ad featuring Chris Noth, the actor who portrayed Big. But days later the ad was deleted when Noth was accused of sexual assault, which he denied. In January, Billions also featured a character having a heart attack after riding a Peloton bike.
Further Reading
Peloton CEO Steps Down, Company Cuts 2,800 Jobs As Part Of Overhaul (Forbes)
Peloton Shares Fall After New CEO Says Company Won’t Be Sold In The ‘Foreseeable Future’ (Forbes)
Source: https://www.forbes.com/sites/marisadellatto/2022/04/14/peloton-hikes-membership-price-but-cuts-equipment-costs/