Technogym is set to make its foray into streaming-online-fitness classes via digital platforms on its machines — putting the company on a collision course with the popular Peloton Interactive.
The Milan-listed athletic-equipment outfit, characterized by some as the Netflix
of fitness, is reinventing itself, in an effort to boost earnings, with its Technogym Live, announced in March but set to launch officially early next week.
s one of the largest fitness-equipment makers in the world and boasts a range of machines that include exercise bikes, treadmills and elliptical climbers for cardio and strength training.
Its streaming service allows gyms and hotels to upload their own live or recorded classes on its platforms, which users around the world can purchase. Technogym is hoping to create a marketplace that encourages price competition and a more diverse range of classes through a revenue-sharing model. It’s a similar model to Apple’s
Rival Peloton Interactive
Peloton’s bikes and treadmills cost $2,000 to $4,000, with an additional $39 a month for a subscription. (Technogym hasn’t disclosed pricing for its services.) Peloton lost $196 million in the year through June, according to its most recent regulatory filing.
Technogym, in contrast, has the advantage of being profitable — and selling Italian-designed machines. While the shares have increased 125% over the past three years, they have slid 13% in the past six months due to market weakness and political turmoil in Italy.
Peloton’s stock, meanwhile, has tumbled 7.8% since late September amid a broad rejection by investors of nonprofitable, richly valued companies, including WeWork parent We Co., which pulled its planned initial public offering last month.
Technogym started in 1983 from the garage of fitness enthusiast and industrial designer Nerio Alessandri, then 22. With the help of his brother, Pierluigi, CEO Alessandri developed a machine to tone leg muscles. Technogym now employs 2,300 people and owns manufacturing sites in Cesena, Italy, and Slovakia.
It also organizes lease agreements with financial partners. While this isn’t a huge revenue generator, it helps boost its user base. What generates more income is a buyback plan, whereby Technogym purchases and refurbishes used equipment. These units are resold to low-cost gyms at a double-digit discount.
It has a market value of €2 billion ($2.2 billion) and delivered half-year earnings before interest, tax, depreciation and amortization (Ebitda) of €47 million, just below the €48 million expected by some analysts on sales of €295 million for the six months to June. Full-year Ebitda for 2018 were €134 million.