Peloton Output Park to Cost Approx. $400 Million
The Peloton Output Park, a million-square-foot facility, will add more than 2,000 jobs and start producing equipment in 2023.
Peloton has announced plans to build its first factory in the U.S. The company has selected land in Wood County, Ohio, for the Peloton Output Park. The company plans to commit approximately $400 million to the facility and deliver the first products made on its floors in 2023.
Contingent on final approvals from state and local officials, the complex is expected to sit on more than 200 acres in Troy Township and boast more than a million square feet of space for manufacturing, offices and more (including an employee fitness center, of course).
Wood County is a rural area in Northern Ohio, near the Michigan border. Peloton estimates that the facility will add more than 2,000 jobs to the local economy.
As Peloton bikes surged in popularity last year, due in large part to the COVID-19 pandemic, the company struggled to meet demand with its outsourced manufacturing network across Asia, leading to weeks-long wait times for buyers. In December, Peloton acquired Precor, a manufacturer of cardio and weight machines, for $420 million and with it 625,000 square feet of manufacturing capacity in North Carolina and Washington State. The Ohio facility will bring it closer to filling the manufacturing capacity gap.
In a statement, CEO John Foley said “the new Peloton Output Park gives us a massive strategic lever to make sure we have capacity, quality, and economies of scale in our bike and tread product lines, to support our continued growth for years and years to come.”
Peloton faced a crisis in April and May due to federal regulators’ safety warning about its treadmills and expects to lose $165 million in costs related to recalls and lost sales of those machines. However, the general trajectory for the chic connected fitness device company is still upward. In the first quarter of 2021, Peloton’s total revenue was $1.26 billion, more than double the $524.6 million from that quarter of 2020.
