Peloton and Adidas Team Up

Peloton’s New Apparel Line

Peloton (PTON) and Adidas (ADDYY) are joining forces to launch a new apparel line which will feature unisex styles and inclusive sizing. The line was created with input from several of Peloton’s top instructors, including Robin Arzon, Ally Love and Cody Rigsby.
The clothes will be available for purchase starting March 25 on both companies’ websites and in some Adidas and Peloton stores. Adidas and Peloton did not share financial terms of the deal.

Peloton’s Other Clothing Partnerships

Adidas is not the first clothing company to partner with Peloton. The connected fitness company makes its own branded clothing and sells apparel and accessories from large names like Lululemon (LULU) and Nike (NKE), as well as smaller brands like Beyond Yoga and Spiritual Gangster.

Peloton’s clothing arm has not been a strong source of revenue, but it has fueled growth for its app. When users sign up for the app they receive referral codes for clothing discounts. Peloton’s clothing partnerships also help it stay competitive with other at-home fitness companies, which offer their own clothing deals.

Peloton’s Next Challenge

Peloton’s share price climbed over 440% in 2020 and the company has a market capitalization of over $31 billion. But the stock is currently down about 30% year to date.

Demand for Peloton bikes surged during the pandemic as gyms shuttered. As more people receive COVID-19 vaccines, some analysts wonder if Peloton will be able to hold on to customers’ attention or if the brand will become less relevant. By diversifying through clothing partnerships and other strategies, Peloton hopes to be ready for whatever the coming months bring.

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