Peloton Delays the Relaunch of Its Less Expensive Treadmill As It Deals With Safety Concerns
In 2021, Peloton Hoped to Make Its Treadmills As Hot As Its Bicycles. Now It’s Recalling and Delaying Its Whole Treadmill Line
Peloton is delaying the relaunch of its cheaper treadmill model in the United States to install new safety features, a decision that comes amid a fiasco in which the company, after weeks of defiance, agreed to recall two treadmill models because of safety flaws.
The company planned to make the new Tread, costing $2,495 and geared towards more casual runners than its $4,295 Tread+, available on May 27. The product has been sold in the U.K. since January and Canada since February.
CEO John Foley told CNBC he did not know when the treadmills will go on the market in the States. “This process typically takes six to eight weeks,” he said. “It could take longer. So we can’t offer an on-sale or revised launch date at this time.”
This narrative may get confusing from this point on because of the similar names attached to similar Peloton models: A Peloton treadmill called the Tread was briefly on sale, starting in 2018. About 1,000 are in use in the U.S. This week, the federal Consumer Protection Safety Protection announced that those machines have a flaw that could cause the touchscreen to detach during use potentially causing injury. Peloton has agreed to recall them. Presumably, the company is fixing the same flaw in its relaunched Treads, but it has not given specifics.
However, the Tread was not the treadmill that had been causing the company such negative press. On April 17, the CPSP issued a blistering advisory telling consumers with children to cease using the Tread+, claiming it had investigated 40 incidents in which children approached the machine and were pulled under it and pinned down. After weeks of insisting the Tread+ was safe when users followed instructions, Peloton announced a voluntary recall of the Tread+ on Wednesday, admitting that it had “made a mistake.” About 125,000 Tread+ machines had been sold since November. The second recall of the older treadmill, the Tread, was a surprise.
As part of its effort to expand further into the treadmill market, the company had planned to offer the relaunched Tread to more casual runners who might balk at the price tag of the Tread+. The running platform and flat screen of the Tread are smaller and it possess a traditional running belt, as opposed to the shock-absorbent slat belt of the Tread+.
It seems like Peloton will effectively be absent from the treadmill market, as it works to reacquire and recycle the Tread and Tread+ machines from consumers who purchased them. Peloton adjusted its revenue forecast for the current quarter to account for $165 million in costs due to the treadmill issue.
Peloton’s stock prices doubled in the last year, boosted by the interest in home exercise equipment generated to the COVID-19 and Peloton’s preexisting chic reputation, particular for its stationary bicycles. The stock price wavered amid the treadmill safety issues, averaging about $120 a share in the weeks before the CPSP advisory and reaching a seven-month low of $82.62 on Wednesday, the day the company announced the recalls. It continued to fall during the two weeks in which Peloton vehemently refused to recall the Tread+. The stabilization of the situation seems to have caused a slight rebound. The price sits, as of this writing, at $88.55.
