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Peloton’s holiday sales may have hurt SoulCycle worse than Trump fundraiser boycotts

SoulCycle’s sales declined nearly 30 percent in the beginning of 2020, according to new data.

A drawing of a skull and a wheel with the words “soul” and “cycle” below each item. Alexander Tamargo/Getty Images
Rani Molla is a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.

Boycotts this summer hurt SoulCycle. But new data suggests that booming sales from at-home stationary bike competitor Peloton might have had more impact on SoulCycle’s revenue.

SoulCycle’s biggest year-over-year sales declines on record happened in the last week of December through the first weeks of January — prime gift-giving time for Pelotons — with drops in US sales of nearly 30 percent, according to Earnest Research, a company that analyzes web as well as credit and debit card transaction data.

SoulCycle, a brand that markets itself as a progressive company with liberal values, took a big hit last August when news broke that one of its major investors was hosting a Trump reelection fundraiser. Celebrities and regular SoulCyclers alike boycotted the stationary exercise bike company, driving down attendance and overall sales. Sales declines then were in the teens‚ according to Earnest data that averages the previous four weeks for any given date. The drop was much less than the one they have experienced in recent weeks.

SoulCycle, however, disputes these numbers. “Earnest Research’s data is completely false,” a SoulCycle spokesperson said.

SoulCycle refused to specify on the record what is wrong with the data or to offer numbers to the contrary. Investment firms use Earnest Research data to make financial decisions about private companies like SoulCycle.

SoulCycle customers pay about $35 (depending on the location) to attend each class at its physical locations across the country. Peloton users have to buy a $2,245 exercise bike and then pay a monthly subscription ($39) to watch unlimited live or prerecorded classes on the bike’s monitors (Peloton also offers subscriptions without the app so that people with other stationary bikes or a bike at all can still participate in its classes).

Peloton, which has its own financial pressures, went public this summer. Like many other nontraditional tech companies, it has marketed itself as a tech company in addition to one that sells exercise equipment. It engaged in an aggressive marketing campaign this past holiday season, including a much-maligned commercial in which a man buys a woman a Peloton exercise bike that she seems pretty terrified about using. Still, sales numbers from Earnest suggest that Peloton marketing has generally been successful.

Peloton sales numbers have consistently grown — about 60 percent in recent weeks compared with a year earlier, according to Earnest. Those sales could account for at least part of SoulCycle’s decline. Peloton declined to comment on the numbers, citing a quiet period before their earnings announcement.

Peloton posted a net loss of nearly $50 million last quarter on $228 million in revenue.

Earnest’s data also shows that SoulCycle customers are increasingly trying Peloton products, while Peloton customers are going to fewer SoulCycle classes. In December, some 9 percent of SoulCycle customers had made a purchase with Peloton — which could be a subscription payment, a hardware or accessories purchase, or even a pass to one of the company’s three studios — in the last six months, three times the amount that did so a couple years earlier. Meanwhile, just 2 percent of Peloton customers had also spent money at SoulCycle in December, less than half of the share that had done so in 2017, according to the data.

To compete with Peloton, SoulCycle recently announced an at-home version in addition to its classes. Some psychologists have suggested that the latest at-home exercise trend, with its gamification and social elements, might have more staying power than other exercise fads. FlyWheel, another in-studio exercise bike company, recently had to shut down a quarter of its locations, highlighting the pressure it, too, is seeing from Peloton and other at-home exercise options.

Peloton also seems to have more search interest on Google than its competition, according to Google Trends data, with huge peaks every holiday season (though this year that was partly driven by controversy over its holiday commercial).

Commercial controversy aside, if Earnest Research data is correct and the at-home trend continues, Peloton may have an easier ride ahead.