Two years ago, no one had heard of Peloton in Collin County. At the time, the New York-based indoor-cycling company was expanding its operations to Legacy Center in Plano and offering a stationary bike product and workout subscriptions to a North Texas populace already inundated with gyms. Multiple fitness centers can often be found on street corners in the gentrified areas of the county.
When COVID-19 hit in March, forcing nonessential businesses to close, gyms and fitness centers were among the first places to close in Collin County. With thousands of exercise-conscious people forced to stay indoors, at-home fitness content services boomed for companies like Peloton.
Peloton’s revenue nearly tripled and by the end of June, the company was reporting its first-ever quarterly profit, Securities and Exchange Commission documents show.
Now Peloton is expanding its Plano location by about 104,000 square feet and adding 1,600 jobs to the local economy. Those jobs will be in sales, technology, finance and corporate operations roles.
“One of the main reasons we chose to open our Plano Campus in 2018 was the centralized location and deep pool of customer support and technology expertise in the region,” Mariana Garavaglia, Peloton’s chief business operations officer, said in a Dec. 9 press release. “Peloton has grown tremendously in the last two years, and we’re thrilled this larger footprint will allow us to bring key leadership and managerial roles, along with additional entry level positions, to the area.”
In May 2018, when the company first announced it was coming to Texas, Peloton was developing a “key regional campus” at Legacy West, with plans of hiring 400 workers over the next few years, according to a May 16, 2018, Dallas Business Journal report.
The 27,518-square-foot office space, in addition to the field operations site in Arlington, was Peloton’s first support center outside New York City. At the time of the report, Brad Olson, senior vice president of member experience for Peloton, told the Dallas Business Journal that their New York headquarters is located among leading global tech firms that brought a unique energy to their team’s work.
"We expect Legacy Central to become a similar hub for tech companies in DFW, and we want our team to work among like-minded creatives," he said.
As the Dallas Business Journal reported, CBRE Labor Analytics helped Peloton evaluate four different markets for its new support center. Texas -- and more specifically Plano -- fit the bill with its rich history of offering Texans customer support and technological experience due, in no small part, to Ross Perot’s vision for the area.
“The quality of the workforce really sold Peloton on Dallas,” Michael Conner, first vice president with CBRE Labor Analytics, said at the time in a press release.
It is part of the reason why they are expanding their Plano location. Peloton said it will build a one-story building adjacent to its space at the Legacy Central location. Due to open next summer, the location will serve as the company’s corporate training center and include a fitness center. Dallas-based architecture firm Corgan will design the new building. Peloton already has six showrooms across North Texas.
But the stationary bike and home workout market is becoming more competitive with the increase in demand, and there has been some turbulence, mostly in Peloton's supply chain.
Upset with shipping delays, Peloton customers have shared their frustrations on the company’s social media pages. Some have returned their stationary bikes as the company struggles to keep up with demand. Noting its subscriptions have tripled since March, when most U.S. cities imposed lockdown orders, Peloton said in quarterly reports it had to increase capacity to keep up with demand.
Then, in September, Apple announced its own subscription-based workout videos. Fitness content market experts say that means tougher competition for Peloton. The day of Apple's announcement, stocks for Peloton fell by about 2%. Peloton acknowledged Apple's announcement as a sign the market will continue to grow.
“The biggest thing I will say is [that] it’s quite a legitimization of fitness content, to the extent [that] the biggest company in the world, a $2 trillion company, is coming and saying fitness content matters,” Peloton CEO John Foley told CNBC in September.
When word spread Wednesday that Peloton was expanding its operations, the news was met with cheers from public officials. Plano Mayor Harry LaRosiliere heralded the expansion as a testament to his city’s partnership with Peloton. In the Dec. 9 press release, Gov. Greg Abbott marked the news as another example of how Texas has created the right mix of low taxes, investment, and regulations to attract global companies.
“Thanks to Texas’ business-friendly climate, cutting-edge companies like Peloton are choosing to expand their footprint in the Lone Star State,” he said.