Warned... Peloton was the epitome of a corona-conomy thriver. Its stock ~5X'd in 2020, as its connected home fitness products sprinted off shelves. As SoulCycle and Equinox locations reopen, Peloton shares have fallen 26% this year. Peloton has been trying to expand beyond $2K spin bikes — so it launched $4K treadmills in 2018. Those are causing major problems now:
Peloton got defensive... It called the agency’s claims inaccurate, saying there’s no reason to stop using the Tread+ if people follow safety instructions (which are included in the manual and on the treadmill). Peloton's instructions say that children, pets, and objects should always be kept away from the Tread+. Peloton also reminded adults to remove the "Safety Key," which prevents the Tread from being turned on post-workout.
Rule #1 of crisis management = overcorrect... While Peloton may not be technically at fault, it could've done more to maintain trust and safety with users. Potential examples: shipping a protective tread cover to owners, or releasing a safety-related software update. Instead, all it did was warn people to follow instructions. It could also have issued a recall, which would be a big financial hit (think: moving Treads out of houses, plus compensating owners). Still, sometimes companies recall products — and Peloton now faces mounting pressure to recall its Treads.