![]() Socha agreed there will always be a space for fitness hardware. Siegel added that there will always be certain people who absolutely love working out at home, and some that absolutely love working out in-person with other people. “I think the point we have to remember just like anything else, is that we run a risk of overgeneralizing always.” Now, people believe at-home fitness is imploding and we understand that gyms are here to stay,” Simeon Siegel, managing director and senior analyst at BMO Capital Markets, said. “Initially, people believed gyms would be irrelevant and at-home fitness would grow to the moon. ![]() What’s more, Peloton CEO Barry McCarthy said that the company was exploring a sale of Precor, less than three years after acquiring it. Peloton also announced during a February 2021 earnings call that it would invest $100 million more into air and ocean freight deliveries. Overtime, as sales started to decline dramatically, Peloton resorted to multiple rounds of layoffs to cut costs. Peloton, in particular has become the poster child for responding too optimistically to pandemic-induced growth.ĭuring the height of pandemic demand, Peloton bought Precor, a U.S.-based manufacturer of fitness equipment in December 2020. The other challenge many at-home fitness startups have had to contend with is readjusting their growth expectations after finding the pandemic-induced boom in sales didn’t last forever. The studio’s essentials program has over 9 million members, the company noted in its fourth quarter earnings call. Lululemon, for example, recently said it will be expanding its Lululemon Studio’s premium tier membership program by enabling guests to access its digital fitness content via a new app, launching this summer, for a lower monthly fee. However, the fact that streaming service subscriptions are still increasing and have a higher protected priority than certain other categories, provides some hope for these at-home fitness businesses, said Socha. “When we specifically go under the hood, and look at what areas consumers are cutting their discretionary spending, fitness and recreational activities have experienced one of the steepest pull backs in spend and deprioritization under discretionary categories,” she added. “We’re now seeing a 65% increase in consumers cutting their discretionary spending compared to 2022,” Kassi Socha said. Kassi Socha, director analyst at research firm Gartner, pointed to recent data from her firm indicating that 38% of consumers are now cutting back on discretionary spending as one of the reasons why at-home fitness startups are struggling right now. Some of them, like Lululemon, are focusing more on subscription and digital content not tied to the purchase of expensive hardware. In turn, some of these companies are shifting strategies. Retail analysts told Modern Retail that the at-home fitness industry is suffering from market saturation for a particular kind of gear, a lack of consumer interest in at-home fitness compared to before the pandemic and a general fall in consumer discretionary spending. It posted a loss of $335.4 million for the same period. For the most recent quarter, Peloton reported a 30% decline in revenue to $792.7 million at the end of December 31, 2022. Meanwhile, cycling giant Peloton has been struggling to stem losses as it faces declining demand. Earlier this month, weight training platform Tonal said its founder Aly Orady is stepping down amid a broader restructuring at the company, as it continues to focus on profitability. The news is the latest blow to the at-home fitness industry.
0 Comments
Leave a Reply. |