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Could Peloton Actually Save Gyms?

By Brian Withers - Feb 26, 2021 at 7:12AM

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Its new acquisition might help.

Peloton's (PTON 6.51%) recent acquisition of Precor puts the company in an interesting situation. The idea behind the workout-at-home brand was to make it easier for its members to get a workout without going to the gym. But Precor's primary product is commercial gym equipment for customers like gyms, hotels, apartment complexes, or corporate workout facilities. On a Fool Live episode recorded on Feb. 6, Motley Fool analyst Tim Beyers and Fool contributor Brian Withers discuss how this could play out for Peloton in response to a viewer question.

Tim Beyers: Ann says, "Tim and Brian, thoughts of Peloton getting into more gyms and turning all Precor equipment into Connected equipment, because Precor makes a lot of its own equipment?" I do think you will see Peloton try to figure out more Connected equipment from Precor. Yes, that is one way to increase the optionally of the Peloton brand. I definitely think that's true. Getting into more gyms, no idea. Brian, do you have a thought on that?

Brian Withers: I have a couple of things. I've been through some mergers and what happens in these mergers. Unfortunately, they can't do a lot yet until the whole thing gets approved, but they're going to go out and they're going to look at brand recognition for Precor versus Peloton. Over time, I think what they're going to want to do, is push the Peloton brand.

But they should go at it in a very incremental approach. As they introduce new equipment, to your point Tim, I think they're going to take the best of Precor, and the best of Peloton, and they're going to produce some really cool gym equipment that will snyc to your app, and you'll never have to count, you'll never have to have a tracker thing. There's some really cool things that you can do with technology. Even your phone has an RF[ID chip] thing in it, and when you sit down at the new Peloton slash Precor equipment, it'll go, "Hi Brian. Last time you did 50 pounds and 20 things [reps] last Tuesday."

Tim Beyers: Right.

Brian Withers: Where would you like to set your thing [weight]? To me, there's a tremendous amount of potential here, but they got a crawl, walk, run. I think the potential is there and I think the market is seeing the potential. But the potential to reality is going to take years.

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