FITNESS FIGHTPeloton is facing off
against a growing
list of rivals. Here are
some of them.APPLECEO Tim Cook says
Apple’s greatest
contribution to man-
kind will be in health.
Apple Fitness+, a
workout app intro-
duced in December, is
a key part of that push.ICON HEALTH &
FITNESSThe fitness equip-
ment maker pitches
iFit, its eight-year-old
fitness software, as a
Peloton alternative.
The company plans to
go public soon.PLANET FITNESSThe gym franchiser,
which has lost legions
of members because
of the pandemic,
beefed up its app in
April with content
from Icon’s iFit.LULULEMONKnown for its athlei-
sure wear, Lululemon
in June paid $500 mil-
lion for Mirror, a
maker of a $1,500
wall-mounted device
that streams video
of vinyasa flows and
kickboxing.EQUINOX GROUPThe gym chain started
offering $2,500
SoulCycle bikes last
year. Its spin classes
are available through
Variis, an Equinox-
owned app that
features content from
Equinox subsidiaries
including Blink Fit-
ness and Pure Yoga.and should trade at $33,
or nearly 80% lower than
where it is today.
Whichever the case,
Peloton’s business is grow-
ing quickly. The company
saw $1.8 billion in sales
during its fiscal year ended
June 30, 2020, doubling
from the year before. Most
of that money came from
selling bikes, which cost
up to $2,500. But the
company is also focused
on adding to its 1.8 million
digital subscribers, who
pay up to $39 monthly for
virtual classes.
For most of its history,
Peloton has hemorrhaged
money. During the pan-
demic, however, with the
influx of new customers,
it finally switched gears
into profitability—nearly
$160 million in the past
two quarters combined.
Still, Peloton has found
itself on the defensive
lately. During the mad-
ness of the pandemic,
a spike in customers
inconveniently coincided
with a crippled supply
chain. Quarantined ships,
jammed-up terminals, and
closed warehouses stalled
the import and distribu-
tion of Peloton’s bikes and
treadmills from Taiwan,
its main manufacturing
base. Customers, strung
along and disappointed by
continual delivery delays,
vented on social media.
Foley ultimately apolo-
gized for the problem and
promised to do better. The
company expects to clear
its backlog by spring.
While Peloton whips
itself into shape, competi-
tors are angling to steal
the lead by doubling down
on workout tech of their
own. In April, 45-year-old
Icon started offering Plan-
et Fitness’s then 15 million
members access to iFit, its
catalog of streamed fitness
classes. In June, clothing
retailer Lululemon paid
a half- billion dollars for
Mirror, the maker of a
smart screen for workouts.
And in December, Apple
debuted Fitness+, a sub-
scription service for online
exercise classes.
Meanwhile, Nike,
Under Armour, and Strava
are revving up their own
fitness apps.
Will any of these, in-
cluding Peloton, have stay-
ing power after the virus
subsides? “It has long been
our thesis that fitness is
moving to the home,” says
Jill Woodworth, Peloton’s
chief financial officer. “We
don’t think that’s going
to abate when COVID
is over.”
Foley puts it another
way: “We sell people ef-
fectively a Trojan horse.”
He means that buyers of
Peloton’s equipment get
hooked on subscribing to
Peloton’s classes, and are
therefore unlikely to defect
to rivals.
Peloton is extending its
hooks too. In December
it shelled out $420 mil-
lion for Precor, a maker
of exercise equipment for
hotels and gyms. That
business will enable Pelo-
ton to follow its devotees
on business trips and
vacations. Crucially, the
acquisition also expands
Peloton’s manufacturing
footprint beyond Asia to
the U.S., alleviating some
logistical challenges.On a mid-January day,
I tour a new Peloton R&D
facility that opened as the
pandemic struck. Here,
Peloton tries to improve
its products and dream up
new types of torture racks
for its customers.
At one point, cofounder
Cortese lets me peek in-
side a room that contains
equipment undergoing
testing. Near the door-
way, a bicycle hooked up
to a computer is pedal-
ing away with no one
in the seat, as though a
ghost is riding it. On the
other side of the room,
I glimpse something I
doubt I’m supposed to
see. It’s a long-rumored
follow-up piece of equip-
ment that the company
has never officially con-
firmed: a rowing machine.
When I ask about the
machine later, a Peloton
spokesperson says the
company “often reviews
and tests all kinds [of
tech], but that doesn’t
mean we plan to pursue
any of those particular
product areas.”
By the time I com-
plete my own post-riot
workout, I’m panting and
perspiring. The class is
cathartic, and the trainer’s
soothingly anodyne com-
mentary assuages the
recent terror of insur-
rection.
At the end of the ses-
sion, pop singer Lizzo
croons during the cool-
down phase, “Baby, how
you feeling?” I wipe the
sweat from my brow and
kick my heels from their
foot clamps as the chorus
arrives. “Feeling good
as hell.”THE BRIEF — TECH