Peloton debuts new treadmills with more safety features amid government safety investigation09/01/2021
Peloton issuing recall on treadmills may impact demand: BMO managing director
BMO Capital Markets managing director Simeon Siegel discusses the impact of Peloton’s treadmill recall.
Peloton unveiled a treadmill on Monday that it says is equipped with new safety features as the company faces multiple government probes for a previous model that allegedly caused injuries — and at least one death.
It’s the first time since May — when the company recalled its treadmills, which start at $2,500 — that a new, revamped model is now available for sale.
The company, which is the subject of investigations by the Securities and Exchange Commission, the U.S. Department of Justice, and the Department of Homeland Security over its public disclosures about reported consumer injuries, has redesigned its basic treadmill, the Peloton Tread.
Peloton’s high-end Tread + — which is not currently being sold — was the main focus of a massive consumer recall in May.
The basic $2,495 Peloton Tread now comes with such features as digital passcode to unlock the belt before a workout, a safety key that stops the machine quickly, and a stop button.
These new features are in response to more than 70 reported safety incidents involving Peloton’s pricey treadmills, including several young children and toddlers being sucked under the machines.
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One child was killed after being pulled under a machine. The company disclosed the death involving a Tread + in March, but it initially pushed back on efforts by the U.S. Consumer Product Safety Commission to recall the treadmills.
Peloton chief executive and co-founder, John Foley, initially told consumers that the CPSC was providing "misleading and inaccurate" information about the exercise machines. He also advised customers to continue using the Tread + as long as all warning and safety instructions were followed. But Foley later apologized for the company’s reaction to the CPSC’s advisory.
"I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+. We should have engaged more productively with them from the outset," Foley said in a statement. "For that, I apologize."
Peloton is facing multiple lawsuits filed by injured customers.
In May, the company recalled some 125,000 Tread + machines and some 1,050 Treads. The less expensive version had problems with its touchscreens remaining affixed to the machines.
Peloton said it’s offering a free repair to existing Treads to ensure that the touchscreens "remain securely attached." New Treads sold after today will incorporate these same changes, the company said.
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"We’ll always continue to innovate our hardware, software, and safety features to live up to our commitment to Member safety and to improving the full Member experience," Foley said in a statement about the redesigned treadmills.
On Friday, shares of the company fell 8.5% to $104.34, the worst one-day decline since early May, when it disclosed the probes by the regulatory agencies.
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