Another big announcement from Peloton to add to the list today. Along with price increases on the Tread and Bike+, layoffs of hundreds of member support employees, and the closing warehouses and shifting to third party deliveries, Peloton has also announced to their staff that they will be closing many of their retail storefronts across North America in the coming months.
Peloton CEO Barry McCarthy explained this decision in his memo to employees that went out today, saying:
“Lastly, we need to rebalance our e-Commerce and retail mix to drive efficiencies, which means we will reduce our retail presence across North America. This decision will result in a significant and aggressive reduction of Peloton’s retail footprint. Data tells us that in a post-COVID economy, consumers want a mix of virtual and in-person engagement with the brands they love, meaning a hybrid model of e-commerce as well as limited physical retail touchpoints. We have to meet our prospective Members where they are.
We will provide future updates on which retail operations will be impacted by this decision in the coming months. We do not anticipate closing retail locations in calendar 2022, but the timing is uncertain as we begin negotiations to exit our store leases.”
There is no information available yet as to what store locations will be closing, nor how many retail stores will be left once the closures are complete. These decisions and closures will take place over the course of the next few months, with some closures possibly starting sooner, if necessary.
Currently, Peloton has 97 showrooms throughout the US and Canada, so these closures mean another huge round of layoffs for the retail employees is coming. Peloton Showroom employees work on commission (and saw their effective pay & commission drastically reduced last year), and can even assist you over the phone, so if you do plan on making a purchase soon, you can help your local employees out in a huge way by ordering through the local showroom (either in person or via phone – and if you don’t have one near you we’re sure any random showroom would be happy to take your call).
The closure of so many Peloton Showrooms will drastically impact the accessibility of prospective customers to try out a Bike, Bike+, or Tread before purchase. It will be interesting to watch what impact this may have on the future of Peloton equipment sales. Will potential members be less likely to buy the Peloton Rower (which is currently in beta testing) if they can’t try it out in a showroom first?
Share your experiences at Peloton Showrooms below. Do you think these closures will help or hurt Peloton’s business?
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I used to love having a Peloton store 5 mins away from my house. People were nice and professional. However, it changed over time. Last time I went there, I told them I can make an appointment for bike fitting and come back with proper clothes and shoes. They said I didn’t have to. Right away they made me hop on the bike with my running shoes on. I wanted to at least burrow the bike shoes. But they didn’t let me. I was wearing jeans and they said it didn’t matter. I was so disappointed. That was not proper bike fitting. One of the employees made me pedal less than 10 seconds and asked what number my seat was set at home. I answered “14” and he said “just change to 13. You are fine”
I never went back there after that. I don’t mind at all if the Oak Brook showroom is one of the stores that will be closed.
Peloton has just laid off almost 900 of its dedicated warehouse, delivery and repair service personnel. It plans on outsourcing this vital component to a third party. Delivery and repair teams are the face of the company after the initial purchase. A disinterested and untrained third party will kill the rest Peloton.
I went in to try a bike in Corte Madera, CA. I’d ridden only mountain bikes in the past (no clip-in special shoes). The guy set up the bike, had me clip in, set a ride for 20 minutes (the bike was in the far back of the store) and left. He never checked on me. When I was finished, I tried to unclip, but it was too tight to twist out of. I tried to undo the shoes, but hadn’t seen this type before. He took my purse with my phone, so I couldn’t call and the music was blasting so he didn’t hear me shouting for him. I figured out how to undo the shoes and got off. But, it was rude. When I told him that he should check on people (I did mention I was getting the Peloton to rehab from heart surgery when I asked to try it), he said he was busy. Really? No one was in and he was playing Candy Crush. Add Corte Madera to the list of stores to close.
Our experience in the Peloton store in Bethesda, Maryland, was so positive that it makes me sad to read this. We talked to two employees about how much we loved the product, what a life-changing difference it had made for our overall health, how we had bought one for one child, and how we were now likely to buy one for a child who lives in Maryland. It was almost like finding friends and so I will be sorry to this opportunity for community support and connection to be lost.