racing bike on wall

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.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

TLS 1.2 Encrypted
Equal Housing Lender