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Planet Fitness Expands While Peloton Fades Into Darkness

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COVID-19 crushed the gym industry, and many closed their doors over the last two years. People replaced gym memberships with daily rides on Peloton stationary bikes at home. However, the trend to replace gym workouts with at-home ones appears to be waning fast as Planet Fitness is expected to increase its national footprint. 

Let’s begin with the Peloton news this week of alleged leaked memos containing confidential information that led CNBC to publish a report about the company experiencing a “significant reduction” in demand.

Meanwhile, Planet Fitness, one of the largest fitness clubs in the US with over 2,000 locations, is set to embark on a debt borrowing binge next week to expand its gym locations on a bet that consumers are expected to return as the Omicron spread eases. 

“For Planet Fitness, as much as $325 million of the money it raises will help pay for more than 100 gyms that it’s buying for $800 million by taking over its oldest franchisee, Sunshine Fitness Growth Holdings. The rest of the bonds it sells will refinance debt,” Bloomberg said. 

We see a major trend playing out: at-home workouts slump as the virus eases and people return to the gym. Already, Peloton workouts completed worldwide topped in the fourth quarter of 2021. Either people are getting lazy or they’re giving up on their bike and returning to the gym. 

http://www.zerohedge.com/

The change of consumer preference from at-home workouts to gyms as COVID subsides could be reflected in investors’ view that Planet Fitness will be the winner this year. 

http://www.zerohedge.com/

So back to the gym? Perhaps so.

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