Peloton has been hit with another branding crisis after a major character in the Season 6 premiere of Showtime’s Billions was depicted having a heart attack after riding one of its bikes, about a month after a similar scene in And Just Like That.
After a week of trouble, the exercise company’s stock dropped 27% due to reports that it was planning on putting off production.
To cap it all off, the brand faced a déjà vu moment after a scene in Sunday’s episode of ‘Billions’ that saw fictional character Mike Wagner, played by David Costabile, nearly suffering the same fate as Chris Noth’s Mr. Big in HBO’s “Sex and the City” sequel.
Wagner appears on the episode, getting off the bicycle and refuting the assertions of others that he has a heart attack. However, Wagner describes other symptoms including jaw discomfort and shortness in breath.
He is rushed to an ambulance and soon recovers, however, only to make a grand entrance in the next scene and proclaim, ‘I’m not going out like Mr. Big.’
Mike Wagner, played by David Costabile, is seen in the Season 6 premiere of Showtime’s Billions having a heart attack after riding a Peloton bike
Wagner gets off the bike and nearly suffers the same fate as Chris Noth’s Mr. Big in HBO’s “Sex and the City” sequel.
He is rushed to an ambulance and soon recovers, however, only to make a grand entrance in the next scene and proclaim, ‘I’m not going out like Mr. Big’
But Peloton didn’t seem to appreciate the quip, taking to Twitter ahead of Sunday’s on-air premiere to say that the company did not give consent for its brand or equipment to be used in the show.
‘We get TV shows want to include @onepeloton to get people talking, but to be clear, we did *not* agree for our brand or IP to be used on @SHO_Billions or provide any equipment. As the show itself points out, cardio-vascular exercise helps people lead long, happy lives,’ the company tweeted.
The similarity of both Peloton heart attack scenes was apparently a coincidence as ‘Billions’ wrapped production months before And Just Like That aired, the New York Times reported, adding that the line referencing Mr. Big was added in post-production.
This seen, which aired in mid-December saw Carrie Bradshaw’s husband, Mr. Big fall to the floor and succumb to heart failure moments after finishing a cycling session.
The scene comes about a month after Chris Noth’s Mr. Big suffered the same fate in HBO’s “Sex and the City” sequel
This ad was created by the company to try to distance it from the scene. It featured a Mr. Big who encouraged viewers to get active. After Chris Noth (who plays Mr. Big) was accused of sexual assault, the company removed the commercial.
Peloton later claimed that the equipment was not responsible for the death of its fictional character. It blamed his unhealthy lifestyle and cigar smoking.
A parody commercial featuring Mr. Big, a fit man encouraging people to exercise was also created by the company to try to distance themselves from this scene. After Chris Noth was charged with sexually assaulting 4 women, the company pulled the parody ad.
Noth denies these allegations. However, he admitted that he had sex with Tara Wilson’s first two accusers. Wilson insists they were ‘consensual.
Meanwhile, Blackwells Capital, which has a stake of less than 5% in Peloton, is hoping Peloton will fire CEO and co-founder John Foley and consider an acquisition by a larger technology or fitness-oriented companies, people familiar with the matter told the Wall Street Journal in an article published on Sunday.
Foley and other Peloton insiders have what’s referred to as super-voting Class B shares, which gave them control over 80% of Peloton’s voting power as of Sept. 30, according to a proxy filing, the Wall Street Journal reported. Therefore, Blackwells Capital’s hopes would need to be backed by more lucrative shareholders in order to come to fruition.
Peloton’s CEO John Foley (pictured) has denied halting production of bikes and treadmills after shares in the exercise company dropped 27% on Thursday
This chart illustrates where share prices were at their lowest point on Thursday (at $24.22), which was two years ago.
Peloton share prices dropped by 27% to $24.22 on Thursday, a two-year low, after a leaked presentation revealed it has seen a ‘significant reduction’ in demand for the products and it would subsequently halt production.
Foley tried to squash damaging rumors that the company would stop making treadmills or bikes. ‘Rumors that we are halting all production of bikes and Treads are false,’ he said in a statement.
The company’s “experienced leaks” this week, he said. These contained confidential information and have resulted in a flood of speculation articles in the media.
He said that this information was “incomplete, out-of context, and not reflective on Peloton’s strategy”. Furthermore, he stated that the leaker has been found and will face legal action.
“As we discussed last quarter, we are taking significant corrective actions to improve our profitability outlook and optimize our costs across the company,” Foley said in a memo to employees, CNBC reported.
After cutting its full year outlook by $1B, the company revealed that it will consider closing 20% of its showrooms.
“This includes gross margin improvements, moving to a more variable cost structure, and identifying reductions in our operating expenses as we build a more focused Peloton moving forward.”
CNBC reported by CNBC that the company would suspend bike production for February and March, and stop manufacturing the Tread treadmill machine until after six weeks. It began in February.
Although it was previously reported that Tread+ isn’t planning to make any machines by fiscal 2022, the company has thousands of treadmills and cycles stored in warehouses and on cargo ships. However, a precise number is unknown.
In May of last year, the company said it planned to build a warehouse in Ohio worth $400 million to increase production. But the facility will not be available until 2023. In the meantime, its value has dropped to $40 billion.
In addition, the company stated that they are considering cutting employment and raising prices in response to record-breaking inflation.
The fitness giant has sought help from consulting group McKinsey & Co. to get its finances in order after it slashed its future earnings outlook for 2022 by $1billion last November, down to between $4.4 billion and $4.8 billion.
A leaked audio recording from an internal conference shows management discussing the need to reduce jobs as a way of balancing its crushing bottom line. Peloton, which has its headquarters in New York, showrooms and warehouses throughout the United States, had employed 6,743 people as of June 30, 2021. It also employs more than 1,000 workers worldwide.
Peloton is trying to cut costs by removing 15 showrooms from its 123 locations, according to one executive.
CNBC reported that management discussed the possibility of asking retail store employees to assume more responsibility by handling customer service calls when they aren’t busy.
Peloton will release second quarter figures for February 8th.
While the shares rose by 440% in 2020, they fell 76 percent when COVID locks were removed and gyms reopened.
The stock reached an all-time record of $151.72 in December 2020 after customers wanted to keep working out at home following the closures of many brick-and mortar gyms due to COVID. However, this trend has reversed.
This put the company’s value at $45.7 million. However, it was unable to keep pace with demand for pandemic supplies. As customers waited months, they were unable to order products.
Peloton was once a darling of the pandemic, but now there is a decline in its demand for fitness equipment and classes as more people go to gyms.
CNBC reports that the company had initially placed unrealistic expectations for third and fourth quarters and needed to revise their forecasts on December 14. CNBC says the sales of the Bike, Bike+ and Tread dropped’significantly’.
CNBC reports that the presentation does not include the fee increase for setup and delivery. The change will vary depending on product. It will range from $250 to $350.
The company also isn’t getting enough traction for its new ‘Project Tiger’ (formerly known as Peloton Guide) $495 package that includes strength training programs and products. This realization has made it realize the company will be facing a more challenging post-COVID market.
Project Tiger was originally set for release last October. However, it was pushed back to February. Project Tiger could still be delayed until April. In addition, the company has reduced by $100 the initial price of $595.
The company also saw declines in subscribers. Only 2.5 million were active in the quarter, 161,000 of which were new users. However, it was the highest growth rate in the past two years.
As a result of scandals, the stock price has changed dramatically throughout the year.
After multiple injuries, including the death of a child from an accident, 125,000 treadmills were recalled by the company. U.S. regulators have begun an investigation into the matter.
Peloton was also notified of 72 more complaints about children, adults and pets being pulled beneath the treadmill. This led to 29 injuries.
A video was also posted by the safety agency that demonstrated how someone could be trapped inside the device.
Analysts warned of a difficult path ahead and it reduced its outlook for the full year by as much as $1 billion in November.