The at-home fitness bubble that pumped up in the wake of the covid-19 pandemic sent sales surging at every price point, from high-end equipment to the most basic fitness dumbells.
By January 2022, a quarter of all health and fitness facilities had closed, most of them permanently, and the U.S. fitness industry reported $29.2 billion in lost revenue, according to the National Health & Fitness Alliance (NHFA).
The carnage continues.
Indoor cycling studio SoulCycle announced that it is closing about 20 of its 83 studios and laying off about 75 of its 1,350 employees, a sign that peoples’ exercise habits are still changing. The closures include locations in California, Washington, DC, Massachusetts, Illinois, Florida and Georgia.
“As riders continue to return to in-studio classes there have been many shifts as a result of the pandemic,” a SoulCycle spokesperson told CNN Business in a statement, saying some of those shifts are geography-based.
Peloton, one of the biggest beneficiaries of the at-home fitness bubble, is laying off 780 staff, closing an unspecified number of its 86 stores, raising prices on its equipment and retooling bikes for do-it-yourself assembly to cut costs. The company raised the price of its subscription plan for live and on-demand classes from $39 to $44 per month.
“We’ll continue to cost-reduce the hardware and we will engineer it so that you can assemble it, so that we can ship it via FedEx,” Peloton CEO Barry McCarthy said in an interview.
Meanwhile, you’ll pay $500 more for Pelotons Bike+ which is going up to $2,495 in the U.S. The price of its Tread machine is going up by $800 to $3,495.
Peloton’s revenue in the first quarter fell from $1.26 billion in 2021 to $964.3 million. Its losses grew from $8.6 million a year earlier to $757.1 million in Q1 2022.
The company reported having 2.96 million connected fitness subscribers with Peloton equipment who pay for a membership to its live and on-demand workout classes.
In July, Peloton announced it would stop all in-house manufacturing and instead expand its relationship with a Taiwanese manufacturer. The company also plans to exit last-mile logistics, close its remaining warehouses and shift delivery work to third-party providers, CNBC reported.
Peloton share prices have fallen by more than 60 percent so far this year, with an all-time low of $8.22 in mid-July. Shares traded as high as $120.62 about a year ago. News of the company’s about-face on pricing and cost cutting sent its share prices up 13 percent on Friday Aug. 12.
Mandated closures of health clubs were imposed in many states to try to stop the spread of covid-19, putting an end to 10 years of revenue growth before the outbreak. With temporary closures and the subsequent permanent closures of health clubs and studios, about 1.5 million people lost their jobs in the industry, according to NHFA. That represents about 47 percent of jobs in the industry.
Flywheel, an indoor spin concept similar to SoulCycle, closed permanently in 2020. Other in-home fitness equipment makers are also struggling, including NordicTrack parent company iFit Health and Fitness, which canceled an initial public offering. Tonal, an in-home gym maker, cut 35 percent of its staff in July, CNN reported.
But affordable gym chains such as Planet Fitness seem to be thriving. Charging as little as $10 for a monthly membership, Planet Fitness recently reported that its membership base has grown to 16.5 million.