Peloton on Tuesday stated it's including a brand new train product to its lineup: a rowing machine that begins at $3,195. Shoppers who additionally need to entry its vary of health lessons should shell out one other $528 yearly.
The struggling health firm is touting the machine, referred to as Peloton Row, for its "full-body cardio and power" exercises. However health followers are decrying the machine's value, noting that consumers can even want a full checking account. The Peloton rower sells for greater than 3 times the price of competitor Idea 2, which is taken into account the gold commonplace of rowers and has a price ticket of $990.
There's so much on the road for Peloton, a one-time pandemic darling that misplaced its footing as Individuals ventured again into gyms and misplaced their style for dear residence train gear. Thus far this yr, Peloton has had two rounds of layoffs and a administration shakeup, whereas its inventory has plunged 75%.
Peloton stated it's taking pre-orders for the brand new rowing machine, with supply anticipated in December.
Some folks questioned the pricing of Peloton Row, taking to social media to complain that firm is charging an excessive amount of — particularly because the rower's lineup of health lessons requires an extra expense of $44 a month, or $528 for one yr.
"I can get a [Concept 2] for $1k," one observer wrote on Twitter. "That worth is simply DUMB."
One other shopper stated it isn't solely the worth, but in addition that Peloton is not offering financing choices to potential prospects, which in any other case may make the worth tag extra palatable.
Peloton defended its pricing, noting that the rower is designed to be a "premium expertise."
"There is no such thing as a different related health rower in the marketplace that can afford the identical quantity of content material," spokeswoman Ben Boyd informed CBS MoneyWatch. "The package deal of software program and hardware is totally unmatched."
Barry McCarthy, who Peloton named CEO in February, additionally defended the stiff pricing for its gear at a Goldman Sachs occasion final week.
"We have got a premium providing as a result of, let's face it, you are not price-sensitive," he informed an analyst. "And folks such as you weren't price-sensitive. And if we now have a terrific product, they'll purchase it regardless."
McCarthy additionally stated he expects the net residence health enterprise to rebound whilst COVID-19 eases across the U.S. and Individuals return to the gymnasium.
"As we speak, the class is shrinking. Will it shrink over the long run? I do not assume so. I believe that is a post-COVID phenomenon the place persons are touring, going again to gyms, type of rediscovering the lives that they've gotten away from," he stated. "However within the fullness of time, dwelling a wholesome life-style, I believe, is a part of our worth system, a part of the material of at the moment's growing older economic system."
Certainly, some Wall Road analysts stay bullish on Peloton's prospects regardless of its slowing development and a administration shakeup final week that noticed co-founders John Foley and Hisao Kushi depart the corporate.
Oppeneheimer analysts stated in a analysis observe this week that Peloton retains important aggressive benefits, together with expertise cultivating on-line communities, excessive shopper satisfaction scores and a enterprise mannequin that provides potential for substantial development with a modicum of funding.
The digital health and wellness market additionally stays fragmented, providing alternatives for Peloton to develop its market share, the funding agency stated.