EXCLUSIVE: Can Peloton can ride through this storm? Expert says 'lockdown darling' firm faces competition from new upstart exercise rivals after string of PR disasters
Peloton went from being a 'lockdown darling item' to having to fight a number of PR battles, as a brand expert told MailOnline: 'I don't see how they can ride through this storm'.
Despite once being considered a 'frontrunner' in the wave of fitness tech, customers may be put off by the latest PR disaster after it recalled more than two million of its exercise bikes over a safety hazard, PR and brand expert Mayah Riaz has claimed.
'It's too much to recover from,' Ms Riaz, who helps big brands and celebrities navigate big PR crises, told MailOnline.
She predicted brand loyalty may dip and customers may now choose fitness tech brands 'who do not have a string of PR crises attached to their name,' amid fears the firm could be doomed.
When the pandemic hit in 2020, Peloton enjoyed overnight success when millions of spin enthusiasts around the globe raced to buy its at home exercise equipment.
The company was already riding high off an extremely successful IPO, which went it went public in 2019 saw employees sip champagne and eat seafood as many toasted becoming millionaires overnight.
![A woman seen exercising on a Peloton](https://i.dailymail.co.uk/1s/2023/05/12/14/70908101-12076255-image-a-3_1683896653615.jpg)
A woman seen exercising on a Peloton
![](https://i.dailymail.co.uk/1s/2023/05/12/16/70913647-12076255-image-a-35_1683904423178.jpg)
The company began hiring rapidly and released new products, while spending thousands to get bikes delivered to customers as fast as possible.
But things have not been as rosy for the Peloton tycoons lately amid a series of product recalls, safety investigations and negative portrayals in popular TV programmes.
Its shares nosedived when a return of Sex and the City saw one of its characters, Mr Big, collapse and die of a heart attack shortly after a 45-minute session on one of the exercise bikes - followed shortly after by a similar scene in the show Billions.
And now customers are fearing for their safety after it recalled more than two million of its exercise bikes over a safety hazard which could cause falls and injuries.
The company issued the recall for around 2.2million of the Peloton Bikes Model PL01, sold from January 2018 to May 2023 for about £1,117 ($1,400), after it received 35 reports of the seat post breaking and detaching from the bike during use.
There is no impact to Peloton Bike+ Members nor Peloton original Bike owners in the UK, Germany, and Australia.
Peloton said the safety of its members is paramount.
Ben Boyd, Peloton's SVP of Global Communications, told MailOnline: 'The last thing we would want to do is disappoint our customers.
'What I'm incredibly proud of is the transformation of Peloton over the past year. Not just the work we've done on the business but on our members' safety.
'We introduced new safety protocols that allowed us to identify this issue early, engage the US regulator, and to move swiftly and transparently to get it removed.
'We have a great responsibility to our members, we believe we have to constantly and continually demonstrate why we should be trusted.
'Their safety and experience is simply our top priority.'
He continued: 'The impact we have on our members lives is absolutely a positive one. Empowering them to be best version of themselves is our mission.'
Mr Boyd said Peloton 'voluntarily and proactively reached out to the US regulator' when it became aware of the issue with the product - and was working to help consumers easily swap their seat post.
When asked whether portrayals of Peloton in popular culture were unfair, he said: 'What we're focused on is what's within our control.'
He added that Peloton is undergoing a brand relaunch later this month in order to raise awareness that it is 'more than just a bike company' and offers a whole range of plans and programmes.
![Peloton co-founder John Foley, with his wife Jill, pictured in November 2018](https://i.dailymail.co.uk/1s/2023/05/13/08/70900747-12077707-Peloton_co_founder_John_Foley_with_his_wife_Jill_pictured_in_Nov-a-3_1683964652936.jpg)
Peloton co-founder John Foley, with his wife Jill, pictured in November 2018
Shares in the New York-based company fell by more than seven per cent when the product recall was announced, marking a sharp blow for the fitness brand that has seen its shares plummet by 39 per cent over the last 12 months.
Mayah Riaz, a PR and branding expert, said: 'There seems to be one PR crisis after another for Peloton, a company that saw huge rise during lockdown - it was a lockdown darling item, just like Zoom.
'Having fictitious character in shows having a heart attack after using Peloton proves what I tell my clients all the time, that not all publicity is good publicity.
'The key is always in how a company responds to the bad publicity and Peloton definitely had to do a fair bit of damage control in the court of public opinion.'
Ms Riaz predicted that brand loyalty may dip following the latest product recall, and customers may now choose fitness tech brands 'who do not have a string of PR crises attached to their name,' she added.
She continued: 'I don't see how Peloton can ride through this storm. With the right support around them, all companies can weather a little crisis and bad publicity.
'However, Peloton have had more than a little of late. I would not want to be on the riding seat of handling Pelton's damage control, as it's anyone's guess what will happen on the brand's next ride.'
Meanwhile, Will Hobson, PR director at Rise at Seven, said that he thinks 'the brand is doing the right thing by being transparent and recalling the items',
He added: 'The brand does an amazing job of building their trainers to have celebrity personas'.
The company was on a high in the late 2020 during the pandemic, when stay at home dictats saw its revenue more than double to £1.45bn ($1.82bn) - and peaking at over £3.19bn ($4bn) a year later.
But its shares plunged when Mr Big collapsed and die of a heart attack shortly after a 45-minute session on one of the exercise bikes in Sex and the City.
![Mr Big seen exercising on a Peloton bike in Sex and the City](https://i.dailymail.co.uk/1s/2021/12/09/23/51572969-10294643-image-m-13_1639094282946.jpg)
Mr Big seen exercising on a Peloton bike in Sex and the City
![Mr Big, played by Chris Noth, died of a sudden heart attack, shortly after exercising on a Peloton bike](https://i.dailymail.co.uk/1s/2021/12/09/23/51572957-10294643-image-m-10_1639094217816.jpg)
Mr Big, played by Chris Noth, died of a sudden heart attack, shortly after exercising on a Peloton bike
![Mike Wagner riding a Peloton in the show Billions](https://i.dailymail.co.uk/1s/2023/05/12/18/70908093-12077707-Mike_Wagner_riding_a_Peloton_in_the_show_Billions-a-2_1683911935265.jpg)
Mike Wagner riding a Peloton in the show Billions
The scene, starring Carrie Bradshaw's longtime love interest, saw Peloton's share price plunge by 11.35 per cent just hours after the episode 'And Just Like That' aired.
After an intense workout, Mr Big headed to the shower, when suddenly he clutches his shoulder and collapses, as Carrie - played by Sarah Jessica Parker - states in voice over, 'And just like that Big died.'
Peloton spokesperson Denise Kelly confirmed that the company approved the portrayal of a fictional instructor in the episode, but 'due to confidentiality reasons, HBO did not disclose the broader context surrounding the scene to Peloton in advance,' Kelly said.
It meant that while Peloton knew that their bike would be featured in the episode, but did not know how prominently it would be shown, nor that Mr Big would die.
Following the episode, Peloton issued a statement through Cardiologist Dr Suzanne Steinbaum, insisting that Mr Big riding a Peloton bike would have helped delay his fatal heart attack.
The brand faced something of a déjà vu moment after a scene in ‘Billions’ that saw fictional character Mike Wagner, played by David Costabile, nearly suffering the same fate as Mr Big.
Wagner is seen in the episode getting off the bike and refuting to other characters that he is having a heart attack, despite describing symptoms like shortness of breath and jaw discomfort.
He is rushed to an ambulance and soon recovers, however, only to make a grand entrance in the next scene and proclaim, ‘I’m not going out like Mr. Big.’
But Peloton didn’t seem to appreciate the quip, taking to Twitter ahead of the on-air premiere to say that the company did not give consent for its brand or equipment to be used in the show.
In 2021, Peloton shares plunged 24 per cent after the company reported a net loss of £300 million ($376m) in its third quarter, as the company struggled to recover from a voluntary treadmill recall sparked by an infant's death and 29 other injuries.
It came off of the back of a three-year high for the company, which before Covid had enjoyed huge success with its exercise bikes and subscription-based virtual workout classes as people could not access gyms.
When it was went public in September 2019, many of its employees found they had become millionaires overnight.
After toasting their successes with a feast of seafood and champagne at Hudson Yards in New York, Peloton began to spend exorbitantly to keep up with customer demands and stay ahead of the market.
The company went on a hiring spree, invested hundreds of millions in a production factory in Ohio, but according to Forbes, the company 'now has way too much stock sitting in its inventory' after sinking its money into the product.
Things began to go south as the pandemic ended and people began to return to their old gyms.
Its founder, John Foley stepped down as chief executive and was replaced in February 2022 by former Netflix and Spotify executive, Barry McCarthy. Since then, McCarthy has battled to turn the company around.
Foley - formerly a Barnes and Noble executive - started Peloton in 2012 with the aim of providing convenient alternatives to popular spin classes for well-heeled customers.
The result was a sleek stationary bike which came with a spin classes customers would participate in remotely.
Over the years Peloton grew a devoted following, and in 2019 employees made millions when its IPO earned the company a £5.75bn ($7.2bn) valuation.
![The brand faced something of a déjà vu moment after a scene in ‘Billions’ that saw fictional character Mike Wagner, played by David Costabile, nearly suffering the same fate as Mr Big](https://i.dailymail.co.uk/1s/2023/05/12/18/70905705-12077707-The_brand_faced_something_of_a_d_j_vu_moment_after_a_scene_in_Bi-a-4_1683911935290.jpg)
The brand faced something of a déjà vu moment after a scene in ‘Billions’ that saw fictional character Mike Wagner, played by David Costabile, nearly suffering the same fate as Mr Big
![The premiere episode of a Sex and the City reboot featured Mr Big on a Peloton](https://i.dailymail.co.uk/1s/2021/12/09/23/51572961-10294643-image-a-11_1639094255590.jpg)
The premiere episode of a Sex and the City reboot featured Mr Big on a Peloton
'It felt like nothing could get in the way of all that,' a former employee who attended a lavish IPO party told CNBC, which kicked off years of unforeseeable success as the pandemic launched the company's value into the stratosphere.
As the company began to open up its coffers to meet demand, employees said leadership told them their success was only going to rise.
'There was a lot of blind trust. We all were like, okay, let's go,' the same former employee told CNBC. 'They always had this blind optimism where they were like, we're going all the way to the top.'
The company began hiring rapidly and released new products, while spending thousands to get bikes delivered to customers as fast as possible.
But co-founder Foley faced criticism when he hired a number of 'inexperienced' executives, including his wife Jill.
Meanwhile, thousands were spent on hazard pay for delivery workers, and in certain regions as much as £400 ($500) was spent per-mile delivering bikes, excluding the price of importing products from their overseas factories.
By November 2020 sales had spiked a whopping 232 percent from the previous year, and that December at the height of the holiday season reached its all-time stock high.
'The majority of us, we weren't naive to the fact that, especially in New York, there were people outside in refrigerated trucks because they didn't have enough room in the morgue, but at the same time, we're looking at our Morgan Stanley accounts and now we're all worth, you know, millions,' another former employee, whose net worth touched $5million while working for Peloton, told CNBC.
'I don't think any of us were rooting for the pandemic to continue, but as long as it was going on, it was obviously good for business, and it was good for a lot of people's bank accounts.'
![Peloton co-founder John Foley (pictured centre) celebrates with employees during the company's IPO](https://i.dailymail.co.uk/1s/2023/05/12/18/67889683-12077707-Peloton_co_founder_John_Foley_pictured_centre_celebrates_with_em-a-6_1683911935309.jpg)
Peloton co-founder John Foley (pictured centre) celebrates with employees during the company's IPO
![Co-founder John Foley (pictured) stepped down as Peloton's chief executive last year after share prices plummeted](https://i.dailymail.co.uk/1s/2023/05/12/18/67889615-12077707-Co_founder_John_Foley_pictured_stepped_down_as_Peloton_s_chief_e-a-5_1683911935295.jpg)
Co-founder John Foley (pictured) stepped down as Peloton's chief executive last year after share prices plummeted
But the pandemic which gave so much to the company also began taking its toll.
Despite the company's expenses on logistics, some customers would be left waiting months for equipment they paid thousands for.
In response, Peloton hired more people, and spent more on getting bikes to customers.
To save on international shipping, the company invested £319million ($400m) into a building a factory in Ohio to build its products.
'They were like, we have so much money, we're unstoppable,' a former employee said. 'We just need to deliver the bikes, we just need to get the bikes into homes, we just need to do this.'
So many people were hired, some employees said they didn't have anything to do.
As the company continued pouring money into its booming sales, the severity of the pandemic began to wane, normal life started to resume, and people began to return to gyms as vaccines became widely available.
Sales slowed, revenue declined, and by December 2021 its stock was worth just £28 ($35) per-share from its £133 ($167) high a year earlier.
'We were trying to catch up and spending, spending, spending to catch up, and by the time we finally caught up, demand fell off,' A former employee said. 'Over time we kind of saw how the company responded to the pandemic and then misread the pandemic. It was kind of like, wow, it kind of feels like we got sold down the river.'
Earlier that same year, the company was forced to issue a warning to parents to keep children away from its treadmills after the death of a child in a 'tragic accident'.
By March 2022 Peloton had net-losses of £604million ($757.1m), and by the end of its fiscal year in June those losses had reached nearly £2.39billion ($3bn).
![Former Netflix and Spotify executive, Barry McCarthy, became Peloton 's chief executive last year](https://i.dailymail.co.uk/1s/2023/05/12/18/67889605-12077707-Former_Netflix_and_Spotify_executive_Barry_McCarthy_became_Pelot-a-8_1683911935351.jpg)
Former Netflix and Spotify executive, Barry McCarthy, became Peloton 's chief executive last year
![Pictured: Peloton Studios in New York](https://i.dailymail.co.uk/1s/2023/05/12/18/67889651-12077707-Pictured_Peloton_Studios_in_New_York-a-7_1683911935332.jpg)
Pictured: Peloton Studios in New York
As losses grew to staggering heights, Foley stepped down from his leadership position and was replaced by McCarthy in February 2022.
He began cutting jobs, shuttered the Ohio factory project, outsourced its logistics operations to third-party businesses, and announced plans to close more than a third of its retail stores worldwide.
Despite the massive cuts, employees said they felt they were finally in responsible hands under McCarthy's leadership.
'He seemed the polar opposite of John,' a former-employee told CNBC. 'I think everyone was kind of like, OK, this is a real legitimate business guy with a solid background.'
'We were all hopeful. I was certainly hopeful with his acumen and experience, but I knew it was going to come with some very hard decisions.'
McCarthy's tactics have been promising, with the company's stock rising 26 percent in February following promising second-quarter numbers.
The company has also started focusing its efforts on its digital classes as it discovered roughly half of its subscribers were using the platform on non-Peloton bikes or equipment.
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