Peloton Interactive Inc. (NASDAQ: PTON) plans on building a manufacturing plant in Ohio, said the home fitness equipment maker on Monday. Its first-ever U.S. factory that it’s calling Peloton Output Park (POP) will begin production in 2023.
Peloton shares opened at $101.90 per share (£72 per share) on Monday and slipped to $98.31 per share in the next two hours. In comparison, the stock had started the year 2021 at a much higher $145.96 per share.
Peloton Output Park will create more than 2,000 jobs
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Peloton saw massive growth last year as the Coronavirus pandemic restricted people to their homes, popularising home workouts. The New York-based company has been focusing increasingly on expanding its production network that currently constitutes its own facilities and 3rd party partners in Asia.
According to Peloton, it will invest roughly $400 million to build the Ohio facility, which will create over 2,000 jobs in the upcoming years. CEO John Foley said on Monday:
“The pandemic has demonstrated the need to on-shore manufacturing and rebuild supply chains. The new Peloton Output Park gives us a massive strategic lever to make sure we have the capacity, quality, and economies of scale in our bike and tread product lines.”
The announcement further highlighted that the manufacturing plant to be set up in Troy Township, Wood County, will primarily make three products; the flagship Peloton Bike, Bike+, and Peloton Tread. In April, Peloton completed its $420 million Precor acquisition that it announced in December of 2020.
Peloton recalled thousands of its treadmills due to safety issues
Peloton Output Park will cover more than 200 acres, with manufacturing, office, and amenities space stretched out over more than one million square feet. The new production house will find a spot in the list of the world’s largest connected fitness manufacturing plants.
Earlier this month, Peloton recalled thousands of its treadmills in the U.S. and the U.K. due to safety issues that didn’t only cause injuries for several of its customers but also a tragic death of a six-year-old child. Such reports have weighed heavily on the company’s stock that is currently about 30% down year-to-date.
In comparison, Peloton Interactive performed massively upbeat in the stock market last year with an annual gain of roughly 400%. At the time of writing, the exercise equipment company is valued at $29.82 billion and has a price to earnings ratio of 149.27.