By Erin Griffith
Lauren Allbright, a teacher, children’s book author and triathlete, was antsy from weeks of sheltering in place. So last month, she “panic bought,” she said, a $2,245 Peloton bike.
It was a “pricey decision,” she acknowledged. But her gym was closed, and it had been raining nonstop in Richardson, Texas, where she lives. Soon the heat would make it even harder for her to train outside.
So when Texas extended its stay-in-place rules by a month, Allbright, 39, clicked “buy.” She reasoned that her husband and three children would also use the internet-connected bike, which comes with streaming classes for an extra $39 a month.
“Working out daily is huge for our mental health,” she said.
Peloton, which last year endured a rocky initial public offering and a widely mocked holiday ad, is emerging as a potential winner of the quarantine economy. While gyms, boutique studios and personal trainers have been sidelined, home workout systems are thriving.
Since mid-March, Peloton’s stock has soared 95%, valuing the New York company at $10 billion, or twice as much as the gym chain Planet Fitness. Last month, Peloton reported a record: More than 23,000 people had joined one of its live classes.
On Wednesday, Peloton said its revenue rose 66% in the first three months of 2020 from a year earlier, while it recorded a wider net loss. It ended the quarter with a “backlog” of bike deliveries; it also signed up 1.1 million people to digital-only free trials in March and April.
Its 2.6 million paying members worked out an average of 18 times a month, up from 13 in the previous quarter, the company said. Peloton added that it expected its revenue to more than double in the current quarter.
“The demand is through the roof,” John Foley, the chief executive, said in an interview. “It’s not just people wanting more bikes, but if they have one, they’re using it more.”
Peloton’s fortunes indicate a flip side to the economic devastation that is sweeping through the United States. While more than 30 million Americans are newly out of work because of the pandemic shutdowns, many others still have the disposable income to shell out more than $2,000 for a home exercise bike.
“Consumer habits are fundamentally changed coming out of this crisis and this pandemic,” said Ron Josey, an analyst at JMP Securities. “A device and service like Peloton comes to the forefront in that.”
Other home fitness companies have reported similar surges in demand. Sales at Echelon, which makes a less expensive internet-connected bike, grew five times higher than expected in the first three months of 2020, with demand comparable to Black Friday, said Lou Lentine, the company’s chief executive. Icon Health & Fitness, which owns the NordicTrack and ProForm equipment brands, said sales last month were four times as high as a year earlier.
“It’s absolutely bigger than any other boom time we’ve had,” said Mark Watterson, president of iFit, a division of Icon Health.
New converts include Ben Carlson, a wealth manager in Grand Rapids, Michigan. He wasn’t interested in a home workout setup before because he exercised on lunch breaks at a gym near his office.
But now that he’s working at home with three children under the age of 6, it’s harder to get away for a run. Last month, he bought a Peloton, which he rides after his children are in bed.
The bike is “part of my new life for the time being,” Carlson, 38, said. Even when things reopen, he said, “I don’t know that I’ll be the first one to rush back into the gym.”
Gyms and studios, which have frozen memberships while they are closed, are hurting. Some yoga and dance studios have resorted to asking for donations in exchange for free online classes. Several national gym chains have faced lawsuits and state investigations for charging fees during the shutdown.
SoulCycle, which operates dozens of cycling studios, closed them in March, cutting employee pay by 25% and furloughing its instructors. The company began offering virtual workouts on SiriusXM and through an app called Variis, operated by Equinox Group, SoulCycle’s parent company.
“Saturday Night Live” ribbed SoulCycle’s attempt to move its self-described “inspirational, meditative fitness experience” into instructors’ apartments. “I hear a lot of people talking about antibody. I am pro-body!” an instructor named Toyota, played by Chris Redd, barked.
In March, SoulCycle also began taking preorders for a $2,500 home bike that it announced last year. The bikes, available in certain U.S. cities, are expected to begin shipping this month.
“Equinox Group anticipates the consumer will want experiences both online and offline,” a spokesman said. When its studios reopen, SoulCycle said, it will make changes like placing bikes — normally packed close together — 6 feet apart, significantly cutting down on the number of customers per class.
Peloton stopped filming live classes in early April after an employee at its New York studio tested positive for the coronavirus. But by the end of the month, it was streaming live classes again.
The first one happened April 22 from the apartment of Robin Arzón, Peloton’s head instructor. More than 23,000 customers logged in and rode along with her, issuing virtual high fives and climbing a digital leader board.
“When things are uncertain, we adapt,” Arzón wrote on Instagram, alongside a photo of herself surrounded by production equipment and electrical cords in her apartment.
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