The barrier for entry into the Peloton ecosystem was already pretty high at $2,000 for the bike and $40 monthly to access classes, and now those prices are increasing.
The company just announced that they are raising the purchase price of its two flagship items. The Peloton Bike+ will increase by $500 to $2,500, and the price of the Peloton Tread will increase by $800 to $3,500.
The original Peloton Bike and the AI-assistant strength trainer, Peloton Guide, are staying at $1,500 and $300, respectively. Additionally, subscription prices are also staying the same for now.
This appears to be part of a massive brand overhaul for the subscription-based exercise equipment manufacturer, as the company says in the press release announcing the increases, “price is just one of the many levers we will continue to explore as part of our business transformation strategy.”
Other components of this transformation strategy? Peloton is phasing out brick-and-mortar locations and closing an undisclosed number of its 86 current retail offerings, though this depends on negotiations with various landlords. They are also ceasing the vast majority of in-house shipping, moving to third-party companies to get bikes and treadmills into the hands of consumers.
As you’d expect, these moves have also led to substantial layoffs. Peloton is slashing its customer service team by half, eliminating a number of warehouse jobs, and handing off manufacturing duties to a third party. This adds up to around 1,000 jobs after the company already laid off 3,000 people in February.
Why all of the hubbub? Peloton has experienced falling share prices all year, losing 90 percent of its value in the past 12 months. The price increases on Bike+ and Tread come after the company slashed prices back in April in an attempt to increase its market share.