Connected fitness company Hydrow, Peloton Strength-training company Speede Fitness told CNBC on Thursday that it had acquired a majority stake in the company as sales continued to grow as fitness enthusiasts abandoned cardio in favor of weightlifting.
Hydrow also announced that its CEO and founder Bruce Smith will step down from day-to-day operations and hand over power to President and Chief Financial Officer John Stellato. Smith will take over as chairman of Hydrow’s board of directors.
The company is known for its pricey internet-connected rowing machines that cost between $1,700 and $4,000, and is backed by private equity giants such as Constitution Capital and L Catterton. The company counts several professional athletes and celebrities among its investors, including Kansas City Chiefs tight end Travis Kelce and singer Justin Timberlake.
Hydrow has raised over $300 million in funding. The company said it acquired Speede Fitness to be able to expand into strength training, one of the fastest growing areas in fitness today.
The acquisition comes at a time when fitness enthusiasts are cutting back on aerobic activities such as running and cycling in favor of weight training.
planet fitness It said in November it would replace cardio equipment more slowly, in part to free up money.
“Our members have been looking for more strength training and less cardio,” Planet Fitness Chief Financial Officer Thomas Fitzgerald said on the company’s third-quarter earnings call. He added that strength training equipment costs less than Aerobic training equipment.
fitness for life Highlighting similar trends annual health survey. More than one-third of the respondents said that “building muscle” is their first goal in 2024, an increase of more than 3% from the previous year.
Speede Fitness makes a connected strength training machine that looks a bit like the BowFlex, but incorporates advanced technologies such as artificial intelligence cameras, sensors and a large touch screen.
“Strength training is one of the largest addressable markets in fitness, and Speede’s advanced technology is superior to current products, and this acquisition is an important milestone for both companies,” said Hydrow. “This investment supports Hydrow’s mission to expand into a total body wellness company…its consumer products are expected to be available next year.”
Hydrow’s acquisition and sales growth come amid acquisitions and sales growth for Peloton, which is credited with creating the connected fitness market but is struggling to turn around a slowdown in business. Peloton told CNBC that during the height of the Covid-19 pandemic, Peloton tried to acquire Hydrow instead of building its own rowing machines, but the company refused. Peloton did not respond to CNBC’s request for comment.
Now, Peloton itself has become an acquisition target as numerous private equity firms consider taking the company private after it reported another quarter of declining sales and losses, CNBC reported Tuesday.
Peloton said demand for its fitness equipment has been sluggish as consumers cut back on big-ticket purchases. Still, Hydrow has grown even as Peloton has shrunk.
Deliveries of Hydrow connected rowing machines are up 23% this year compared to the same period last year. In the 12 months ended March 31, Amazon’s sales grew 273% compared with the same period last year.
Hydrow’s growth has raised questions about whether Peloton’s problems have more to do with weakness in the broader home fitness market or to its internal missteps and product missteps. Additionally, the company primarily sold cardio machines, which fell out of favor with consumers while its own members flocked to strength training. The company said the most popular type of class among its digital members was its strength-training content, not cycling or running classes, ranking second among members with Peloton hardware.
Peloton first launched its rowing machine, the Peloton Row, in September 2022, but did little to advertise or highlight the $3,000 machine.
The company previously launched the Peloton Guide, an artificial intelligence device for home-guided strength training, but the device received even less attention than the company’s rowing machines.
The Guide was mentioned in Peloton’s third quarter shareholder letter. The company took an approximately $9.1 million write-down on its product inventory.
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