Peloton’s UK arm has struggled to keep up the momentum of its pandemic success, with the group posting widening losses as sales of the luxury exercise bike fall significantly from their lockdown peak.
In its most recent financial results in the year to June 2022, the American brand’s British division said sales contracted 13 per cent and its losses nearly doubled – reaching £210m compared to £81m the prior year.
However, cost of goods sold increased over 17 per cent, as Peloton splurged on the opening of a permanent London location in Floral Street Covent Garden, which includes three fitness sites.
Peloton saw a rapid rise during the pandemic thanks to the stuck-at-home public being more willing to splash out on its £1,345 exercise bike due to gym closures. In 2019, the US company went public at $29 per share to value the company at $8bn (£6.47bn).
However, the lifting of social distancing restrictions has seen the brand suffer, with the company’s share price having plummeted since its 2021 peak. Shares continued to fall after the news today, down around five per cent to $8.20 at mid-afternoon, representing an around 67 per cent drop on its IPO price.
The brand has also faced reputational challenges, with the business having to recall a number of machines in 2021 following the death of a child in the US and problems over display consoles falling out.
“International markets continue to be a focus and area of growth for Peloton. The work of FY22 has been about bringing costs in line with revenue globally and on a market-by-market basis as we pursue our top priority of becoming free cash flow positive globally,” a Peloton spokesperson said.
“FY22 was a transformational year for Peloton as we began to restructure our operations, reduced headcount, and outsourced manufacturing of connected fitness units.”
“This update reflects the changes Peloton has made in creating a sustainable structure that allows us to focus on growth and continue to deliver an amazing member experience,” they added.