Peloton Offers Free Bikes to Flywheel Customers After Flywheel Discontinues At-Home Business

Peloton makes offer to Flywheel customers
(Photo courtesy Peloton.) Peloton filed its lawsuit against Flywheel Sports in September 2018, accusing a Flywheel investor of attending a private investor conference in order to poach Peloton’s business and technology concepts. The companies reached a settlement in February 2020.

Flywheel Sports, New York, has informed its Flywheel At Home customers that it is discontinuing its at-home service effective March 27, after its recent lawsuit settlement with competitor Peloton.

However, Flywheel and Peloton have a special agreement that will allow displaced Flywheel customers to trade in their at-home bikes for refurbished Peloton bikes at no additional cost, other than the $39 monthly fee for Peloton's membership service.

In February, the companies settled a 16-month-long patent infringement lawsuit in which Peloton accused Flywheel of infringing on its patents. Per the settlement, Flywheel acknowledged that its Fly Anywhere Bike infringed on Peloton patents and agreed to cease all instances of infringement within 60 days.

Flywheel currently operates 29 cycling studios that were recently acquired by New York-based Town Sports International (TSI) for a principal amount of $25 million. Peloton has two studios in New York and one in London, but most of its business is online. 

"While we will discontinue service for our home bike, Flywheel will continue to focus on our original mission of providing the best in-studio cycling experience, and this decision will not impact our studio operations," Flywheel said in a Feb. 19 statement to its customers. "We understand your disappointment at this news, but we have partnered with Peloton to provide an exclusive offer for you to enjoy their world-class at-home product. You will receive an email directly from Peloton shortly with more information on this offer."

Flywheel's live classes will continue until Feb. 29, and on-demand classes will remain available until March 27—the last day during which customers can take advantage of the Peloton offer.

Peloton confirmed that Flywheel-branded shoes are compatible with its bikes, as well as that a one-year limited warranty protection plan will cover each refurbished bike.

Both the lawsuit settlement and discontinuation of Flywheel's at-home service came within weeks of TSI's acquisition of the business.

TSI defines itself as a diversified holding company but remains best known for its signature health club brands, New York Sports Clubs, Philadelphia Sports Clubs, Boston Sports Clubs and Washington Sports Clubs. The company ranked No. 7 on Club Industry’s Top 100 Health Clubs of 2019 list, reporting $443 million in 2018 revenue.

On Feb. 5, Peloton reported a quarterly revenue increase of 77 percent to $466.3 million while also posting $55.4 million in net losses and an adjusted EBITDA loss of $28.4 million.

Download Club Industry's latest report, "Fitness Trends: Spotlight on 2020," for more insight on the in-studio and at-home cycling trend.

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