Peloton Interactive Inc. is still working on a fix for its high-end treadmill that was recalled last year and is extending the refund window for current users, according to the US Consumer Product Safety Commission.
(Bloomberg) — Peloton Interactive Inc.
is still working on a fix for its high-end treadmill that was recalled last year and is extending the refund window for current users, according to the US Consumer Product Safety Commission.
The model, called the Tread+, was pulled off the market in May 2021 following reports that children, pets and adults had been pulled underneath the treadmill, causing injuries.
In at least one case, a child died. At the time, the safety commission recommended that all owners of the Tread+ stop using it immediately and contact Peloton for a refund.
Peloton said last May that it’s working on a hardware fix, but the long wait has raised speculation that the company might not bring back the Tread+.
Tuesday’s announcement signals that Peloton is still actively planning a fix. The fitness company also said it is extending the full refund window for existing Tread+ owners from next month until Nov.
6, 2023.
“Peloton is working on a rear guard that would address the hazard at the back of the treadmill but no repair has been approved to date,” the commission said in a statement on its website.
Consumers who return Treads after November next year will receive prorated refunds. Peloton hasn’t predicted when sales would resume. The commission reiterated that consumers “should immediately stop using the recalled Tread+ treadmills.”
The company’s executives were criticized for their handling of the recall last year.
They initially called warnings about the Tread+ “misleading and inaccurate” and told users there is no reason to stop using the device. To date, in addition to the reported death, Peloton has received 335 incident reports, including 87 reports of injuries to consumers.
Since then, Peloton’s woes have mounted.
Demand slowed as consumers began returning to the office and gyms, and the company misjudged how much inventory it would need. Peloton has now reshuffled management and cut jobs a number of times, and its stock is down more than 90% over the past 12 months.
A filing from the commission last year indicated that Peloton sold about 125,000 Tread+ units during the product’s lifetime, suggesting that it generated revenue of about $500 million in total.
Even before the recall, Peloton paused sales of the Tread+ for several months in 2020 because of delivery problems during the pandemic. Analysts estimated at the time that treadmills made up about 10% of Peloton’s revenue.
The Tread+ was priced at about $4,300 when it was last on sale, making it the company’s most expensive piece of hardware.
Any fix would have to be approved by the commission. Peloton will also likely have to offer the remedy to any existing users who don’t return their treadmill for a refund.
Peloton’s cheaper treadmill, the Tread, was also recalled last year.
In that case, there were at least 18 incidents of its touch screen loosening and six reports of it falling off. But Peloton quickly repaired the problem and returned the Tread to market.
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