Welcome to the Fitt Insider Weekly Debrief. Every weekend, we compile the top stories impacting the business of fitness and wellness from the past week.
Here’s what you need to know…
- Peloton goes B2B
- Hydrow raises new funding amid SPAC rumors
- MIRROR CEO and founder steps down
Peloton’s B2B Play
Be on the lookout for a Peloton bike in your next hotel room.
Virtual bike shop. Following a larger-than-expected quarterly loss, Peloton is launching an online B2B marketplace to target commercial clients. This was to be expected, however, after the $420M Precor acquisition expanded its manufacturing capabilities, product mix, and access to health clubs, hotels, and universities.
Cycling through phases. Combating a post-pandemic sales slump, over the past year, the company has been busy trying to keep pace:
- In June, Peloton announced its foray into corporate wellness, and news broke that the company was developing its own fitness wearable.
- In July, the equipment maker partnered with UnitedHealthcare to provide free subscriptions to insured members, and it unveiled plans to release game-inspired content.
- In August, it cut the price of its original smart bike and debuted its private-label apparel line.
Connected gears. Looking ahead, Peloton hopes an increased presence in the commercial settings will help prop up its stalling direct-to-consumer segment.
Zooming out: As more competitors like Zwift and Hydrow scale up, the connected fitness wars are intensifying. While Peloton has emphasized subscription growth over near-term profitability, the company could hit more speed bumps as it navigates an increasingly crowded market.
Hydrow recently surpassed $200M in total funding thanks to backing from celebrities like Lizzo and Justin Timberlake. Ahead, rumors point to a SPAC IPO that could value the rowing startup at over $1B.
Star power. While many connected fitness companies leverage high-profile partners, Hydrow is all in. With investors like NFL quarterback Aaron Rodgers and leadership from creative director Kevin Hart, the rowing company hopes celebrities will help move the needle.
Sculling forward. Revenue through the first half of 2021 rose 300% YoY after growing 500% in 2020. On the back of record sales and funding, Hydrow plans to invest in engaging live and on-demand content.
What’s next? The four-year-old company is also looking to move beyond the home into commercial settings as a next step. And while Hydrow and Ergatta have an advantage by actually having an erg on the market, if speculation becomes reality, they’ll soon face fierce competition from the likes of Peloton and Zwift in the connected rowing wars.
MIRROR CEO Stepping Down
Challenges ahead. According to lululemon, the apparel maker will fill Putnam’s vacated seat with the right person to steer the connected fitness brand through the “next phase of growth.”
In the interim, lululemon has tapped three MIRROR execs to jointly step up into the role: head of customer Tess Hales, head of operations Olivia Lange, and CTO Kristie D’Ambrosio-Correll. The placeholder co-CEOs will report directly to lululemon CEO Calvin McDonald.
A promising road. As we previously noted, MIRROR is projected to pay back lululemon’s investment within three years. With the connected fitness brand’s revenue projected to grow as much as 65% (reaching $275M) in 2021, the owning activewear giant has laid out an ambitious roadmap:
- Increase MIRROR shop-in-shop displays from 150 to 200 by the holidays
- Continue to scale up live classes with enhanced production capabilities
- Launch MIRROR’s new e-commerce site in time for the holidays
- Bring the connected fitness brand to Canada
Reflecting… Will this changing of the guard pay off? Despite the inherent obstacles, Calvin McDonald seems to think so: “We’re playing the long game,” he said in reference to MIRROR. Said differently? The apparel brand’s digital fitness play is merely warming up.