Growth at Echelon Fitness has slowed as the pandemic ebbs and more people return to gyms, and the shift has prompted the company to “right-size” some departments, its chief executive said.
Lou Lentine, who founded the Chattanooga-based company and has overseen its rapid rise, said he still looks to grow Echelon Fitness Multimedia LLC’s business, but he declined to put a number to it in an email earlier this week.
“We are working with our retailers and don’t have a number to share on expected growth yet, as programs are still under review,” he said. “We hope to continue our growth but are monitoring the market.”
He said Echelon “did right-size several departments globally,” but it also added individuals to specific areas for growth.
The company CEO said the privately held business still has 100 full-time employees in Chattanooga. Companywide, Echelon has 290 employees, he said.
At a December open house of Echelon’s new headquarters on two floors of Liberty Tower downtown, Lentine said the company then employed nearly 250 people, about half in Chattanooga.
During the pandemic’s first year in 2020, Echelon reported that its revenues soared 1,000% as many people stayed away from their offices and other locations. Late last year, Lentine projected company growth at 42% in 2022.
But Lentine said that with people returning to gyms, Echelon’s commercial business is currently its fastest-growing segment.
“We now have over 3,500 units of our equipment in gyms, apartments and hotels,” he said. “Our commercial team, membership and ridership continue to grow.”
Lentine said Echelon is adapting to “move from a pandemic to an endemic world.”
A key rival, publicly-traded Peloton Interactive Inc., reported in February a $439 million second-quarter loss. That was on top of a $376 million loss in the first quarter, according to the company.
John Foley, Peloton’s co-founder and CEO at the time, said in a conference call with analysts then that the company scaled its operations too rapidly and over-invested in certain areas of the business. Foley also announced he would take a new role as executive chairman of the board and Barry McCarthy would assume the CEO’s chair.
Peloton additionally announced in February it was cutting about 2,800 of its jobs worldwide, including some 20% of its corporate workforce.
Lentine said Echelon, like other companies, is dealing with high gas prices, inflation and an economic slowdown.
“We are making strategic decisions for what is best for the business on how to move forward,” he said. “The pandemic brought huge growth to Echelon, and we are confident the future will continue to bring double-digit profitable growth.”
Lentine said he is “very optimistic” about the future and how Echelon responds to “the ever-growing home connected fitness market” in addition to its high-growth commercial business.
“We have a lot of exciting opportunities and look forward to sharing with the world,” he said. “These future announcements will help us continue to be a leading global connected fitness brand.”
Lentine started Echelon in Chattanooga in 2017 and oversaw its speedy run-up. Last December, the company reported it was producing 250 interactive video classes weekly in its studios.
Lentine said the business has expanded well beyond offering stationary bikes, selling about a half-dozen other kinds of fitness equipment. He said Echelon’s No. 1 seller by dollar volume is a treadmill.
The serial inventor and promoter from New Jersey brought his Viatek Consumer Products company to Chattanooga in 2011. He created Echelon to provide what he called a more affordable stationary bike with the tracking and interactive features of Peloton and other higher-priced rivals.