The End of the Cycling Boom Through the Eyes of Two Companies
Pushing Pedals in 2020
As the COVID-19 pandemic unfolded and gyms closed along with other lockdowns, cycling became a popular fitness option. For companies selling both stationary and traditional bicycles, business was brisk.
Virtual classes also exploded in popularity. Instead of working out alongside fellow gym members, on-screen instructors served to motivate the fitness conscious. It wasn’t just the need for exercise driving sales, either. Mass transit was seen as risky given the spread of coronavirus, and cycling to and from work in the open air was preferred.
Things were bound to slow down eventually after all that growth, and that’s exactly what’s happening for cycling and the companies selling associated products.
Popping Peloton’s Tires
The nation was experiencing a sort of bicycle shortage by late 2020 given elevated demand. Bike shops routinely had to turn customers away due to short supply, all while the world’s economy dealt with supply chain snarls that delayed deliveries for all types of products. Peloton (PTON) was exceedingly popular at the time as its stationary bikes, fitness classes, and treadmills were all preferred options among the stuck-at-home crowd.
Peloton poured millions of dollars into ramping up production and shipping. The goal was to keep customers satisfied while they faced months-long delays.
The firm’s current predicament highlights the stark turnaround. Management is now focused on cutting costs, and recently announced another 800 employees would be laid off. Prices have also been raised on Peloton bikes and treadmills.
Soul Crushing Oversupply
SoulCycle, owned by gym chain Equinox, struggled throughout the pandemic. Because in-studio classes are the trendy brands’ bread-and-butter, it had to shut down for close to a year in 2020. Now that locations have reopened, inflation is harming demand. SoulCycle announced this week it will lose close to 25% of its 80 locations and lay off 1,350 workers.
Bike shops across America are also in a difficult position and are facing conditions more in line with Peloton’s predicament. After falling short on inventory two years ago, many stores are now oversupplied. While bike shop revenue soared 46% in 2020, their sales fell 7% in the first half of 2022, per the Wall Street Journal. The cycling trend that hit another gear in recent years has officially pumped the brakes.
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