Rising demand has led to delivery delays and customer complaints, and Peloton said Precor’s “significant U.S. manufacturing presence,” totaling 625,000 square feet of U.S. manufacturing capacity in North Carolina and Washington, will help it deliver products faster and “control the entire production process,” from design to ship. Peloton’s existing manufacturing network includes third-party manufacturers in the U.S.
“It’s no secret that a perpetual surge in demand for Peloton’s products has left the company scrambling to meet demand, particularly given COVID-driven disruptions that have substantially slowed freight from Asia,” said Wedbush analyst James Hardiman in a report Tuesday. “We would assume that Precor’s capacity is far from being fully utilized given a lack of equipment orders from commercial customers.
Expanding its domestic manufacturing footprint isn’t the only reason. Precor, which said on its website it introduced the world’s first elliptical in 1995, will also give Peloton what Precor’s President Rob Barker described as “the fitness industry’s largest commercial network.” Precor will offer Peloton’s “experience” to its commercial customers that also include multifamilies and corporate and college campuses.
When the deal closes, expected in early 2021, Peloton’s connected fitness products also will be made available to Precor’s commercial customers in Peloton’s existing markets, the companies said.
Good article.