Peloton is delaying the opening of a $ 400 million plant in the U.S. by a year because the company is left with too many trainers and too little demand, according to The Post sources.
The plant in Troy, Ohio, will open in 2024, not 2023, the current employee said. The delay will save between $ 100 million and $ 200 million over the 2022-2023 financial year, the source said.
Meanwhile, Peloton’s warehouses and delivery centers have been reduced to 20 hours per week due to reduced demand for training equipment, another source close to the company said.
Acesparks reported on Thursday that the news came as Peloton was planning to temporarily suspend production of its bicycle and treadmill products for several weeks, Acesparks reported on Thursday.
The company plans to suspend bicycle production in February and March, while treadmill production will be suspended for six weeks starting next month, the site said. According to the report, the company does not expect to produce expensive Tread + machines in fiscal 2022.
Shares of Peloton fell 25% to $ 24.07 recently after being suspended several times on Thursday afternoon due to volatility. The company did not respond to comments from The Post.
Peloton’s current employee told The Post that the company had cut back to “snail speed” for months before a pause in order to “keep” production at factories in North Carolina and Washington. [workers] happy and silent without announcing a public closure.
Peloton currently has about 500 days of bike and treadmill inventory, the employee added. Prior to the pandemic, the company would have had only a few months of inventory at any one time – and during the heyday of late 2020 and early 2021, the Peloton had virtually no backup inventory, the employee said.
In an attempt to clean up the surplus cars, Peloton lowered prices during the 2021 Black Friday sale. A source close to the company told The Post that the campaign had increased sales by two or even three digits during the year for several days, but demand fell immediately after the campaign ended.
Peloton’s pandemic-era boom led the company to dramatically expand production, acquire competitors, and plant in Ohio in August at an event attended by Governor Mike DeVine and Peloton CEO John Foley. Even before the plant opened, the Peloton was solidified with very high production capacity and very low demand.
“Peloton has created meaningful inventory before demand declines,” Simeon Siegel, a retail analyst at BMO Capital, told The Post. “Now there is more supply than demand.”