On Monday, Peloton announced that it will invest $400 million to build its first manufacturing facility in the nation. This will speed up both production and deliveries of its fitness equipment including cycles and high-end treadmills. The plant will come up in a 200-acre site located in Troy township in Wood county in Ohio. The facility would be ready by 2023.
The 1 million square feet facility will be called the Peloton Output Park. John Foley CEO of Peloton hopes to lower prices with manufacturing its fitness equipment in the nation but acknowledges that it would take a few years to lower the retail costs of its high-end fitness equipment. It currently manufactures its products in Taiwan. This leads to huge shipping costs as well as delays in getting its equipment to its customers who are mainly based in the US.
The pandemic increased the demand for its fitness equipment and the company has not be able to fulfill its growing orders. This has led to frustration among both its investors and its consumers. In February it had said that it would spend an additional million dollars just to expedite shipping times through air and sea routes.
Peloton also recently acquired fitness equipment maker Precor for $420 million. This manufacturer has facilities in Whitsett North Carolina and Woodinville, Washington. These facilities will be used by Peloton to manufacture its cycles and other treadmills by the end of 2021.
Peloton is saying that it could create up to 2000 jobs in a mostly rural area in Ohio, in a couple of years. Companies gain positive press by introducing manufacturing facilities in the nation and Peloton needs some positive media coverage after its high-end Tread and Tread Plus were recently recalled due to safety defects.
The home fitness equipment market has been rising and Peloton reported a revenue surge of 141 percent in the first quarter of this year from $524.6 million a year earlier to $1.26 billion this year. It said that it is expecting $915 million in sales this quarter.
Photo: Pierre Lecourt
Follow us on Google news for more updates and News