Photo courtesy of Peloton
After 70 injuries and one child's death Peloton is recalling its connected treadmills. This comes following increasing pressure from the U.S. Consumer Product Safety Commission (CPSC).
According to Peloton, this new voluntary recall was done in collaboration with the commission and includes its Peloton Tread+ and Tread.
Peloton said that the recall means sales of the Tread+ will immediately stop. Customers can contact the company about a refund or another "remedy." The Tread was only rolled out for a limited invitation-only release, therefore sales of the product had already stopped in March.
"The agreement, which the Commission voted this morning to accept, requires Peloton to immediately stop selling and distributing both the Tread+ and Tread products in the United States and refund the full purchase price to consumers who wish to return their treadmills," Robert S. Adler, acting chairman of the CPSC, said in a statement.
"The agreement between CPSC and Peloton is the result of weeks of intense negotiation and effort, culminating in a cooperative agreement that I believe serves the best interests of Peloton and of consumers."
This is a change of heart for Peloton, which fought back at the CPSC's initial warnings in April, calling the agencies' release "inaccurate and misleading." The company stressed that the product is only meant to be used by individuals over the age of 16.
"The decision to recall both products was the right thing to do for Peloton’s Members and their families," John Foley, Peloton's CEO, said in a statement. "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. For that, I apologize. Today’s announcement reflects our recognition that, by working closely with the CPSC, we can increase safety awareness for our Members."
WHY IT MATTERS
CPSC's April warning described the risk of injury, especially for children.
"CPSC staff believes the Peloton Tread+ poses serious risks to children for abrasions, fractures, and death. In light of multiple reports of children becoming entrapped, pinned, and pulled under the rear roller of the product, CPSC urges consumers with children at home to stop using the product immediately," the CPSC wrote in a statement in April.
The recall now stops the sales of these products, and the company has pledged to work on the hardware to make the tech safer.
THE LARGER TREND
Peloton's stock has taken a tumble since this news was announced. As of today, the stock is now trading for roughly $84. That's down from the stock's January high of $167.
In 2019, Peloton went public, with shares priced at $29. It's no secret that at-home exercise tools saw a boom during the COVID-19 pandemic. Peloton was a beneficiary of this surge. Last quarter, the workout giant beat its revenue expectation by more than $34 million.
Last week, Peloton released a slew of new features for its products. Top of the list was a feature that lets users tap into scenic routes via their screen.