Planet Fitness is a popular chain of fitness centers (it had more than 15 million members as of March 2020), but the franchise has not embraced modern customer service practices, especially when it comes to canceling membership plans.
Instead of letting you close your account online, Planet Fitness requires you to visit your home club and speak to a representative at the front desk or send a letter via the postal service.
Precor makes cardio and weight machines, and ranks among the largest commercial suppliers of fitness equipment in the world. Peloton plans to use the 40-year-old company’s 625,000 square feet of US manufacturing capacity to make more equipment and ship it to domestic customers sooner.
The takeover will also add nearly 100 people to Peloton’s research-and-development team. Moreover, Peloton hopes it will boost sales of its bikes and treadmills – which are equipped with internet-connected screens to allow users to stream live and on-demand classes – to gyms, hotels, colleges, apartment blocks, and companies that buy exercise equipment for shared use.
Peloton stock has skyrocketed 450% this year as the pandemic has spurred more people to invest in home gyms and online fitness classes. The company’s revenues spiked 232% year-on-year last quarter to $758 million, swinging the company from a $50 million net loss to $69 million in net income.
However, Peloton’s manufacturing and distribution has been severely restricted this year, resulting in lengthy waiting times for customers. Its Precor purchase is likely intended to help iron out those issues.
Here’s a chart showing Peloton’s remarkable stock-price gains this year: