The success of crossing the Atlantic by bicycle was short-lived. CNN Business resumed the evolution of the sector’s activity during the last three years marked by the Covid-19 pandemic. According to market research firm NPD Group, bike dealer revenue grew 46% in 2020 before seeing its growth drop to 4% the following year and finally seeing negative developments in the first half of 2022, with a -7%.
This large gap is explained by circumstances that varied from one to another and strongly influenced consumer behavior during this period. To illustrate the phenomenon, the American website takes the example of exercise bikes, a niche sector that has borne the brunt of the various confinement measures.
disenchanted platoon
If the bicycle represented a credible alternative to public transport to limit the risk of contamination, its connected apartment version made it possible to maintain physical activity close to the courses given in the sports centers, which were later closed, all in the company of a trainer. It’s no wonder, then, that Peloton, a leading indoor sports equipment company, was wiped out in 2020. So much so that it had to spend several hundred million dollars by the end of the year to beef up its production operations. and shipping to reduce delivery times.
Barely two years later, Peloton’s situation is very different. At the end of last week, the company reported the dismissal of 800 employees combined with an increase in its prices. This decision is part of the strategy of the new president who wants to drastically reduce the costs of a box that did not anticipate the return of its clients to gyms when the pandemic subsides. Proof of this is that the Peloton share has already lost more than 90% of its value since the end of 2020.
Inflation is also a problem
And when they have adopted a different strategy, companies in the sector find themselves facing persistent inflation. This is the case of SoulCycle, which opted for gym classes and therefore was forced to close its doors for almost a year. The exercise chain has been gradually resuming its activity for a year and a half, but it does not escape the main problem that arises for most sectors of activity in the economy: a substantial increase in costs.
A week ago, SoulCycle announced that it would close about 20 of its sites, or one in four, and lay off 1,350 of its employees. A spokesperson contacted by CNN Business evokes “many changes due to the pandemic” an opportunity to “resize certain markets” for the company.
This losing streak is making business for low-cost gyms like Planet Fitness, which a few days ago announced a significant increase in its number of members. In search of competitive rates in a persistent inflationary context, their clients pay their subscription only 10 dollars per month while a single course with SoulCycle costs almost four times more.
Source: BFM TV
