With people sheltering at home and gyms closing amid the COVID-19 pandemic, Chattanooga-based Echelon Fitness reported Friday that sales are climbing sharply.
At Walmart alone, the company that markets spin bikes and other equipment along with online training went from selling 80 units a week to 160 a day during COVID-19, Echelon President Lou Lentine said Friday.
"It's like Black Friday every day," he said. "We've been more than overly blessed."
While first-quarter 2020 Echelon sales were trending to double over 2019, the COVID-19 outbreak has driven them to grow by five times, according to the company.
Lentine declined to give revenue numbers for the privately held venture, but said the company is moving toward a $1 billion valuation. To meet growth, the company president said Echelon will be doing another financial round which he indicated "could be quite large."
"It continues to be a very exciting time to keep up with business," he said. "The challenge is we keep running out of inventory."
Lentine said Echelon is looking to hire about 20 more employees in Chattanooga. The company now has about 150 workers, with 90 employees in Chattanooga.
"These are management-level employees we're looking to hire," Lentine said.
Echelon competitor Peloton Interactive also is seeing explosive growth.
Peloton posted revenue for the quarter that ended March 31 of $524.6 million— up 66% over a year ago. That was its best sales quarter ever. Peloton said this week the number could have been higher if it could make bikes as fast as people are wanting the equipment.
Stifel analyst Scott Devitt told MarketWatch that Peloton is "an unstoppable juggernaut to be stopped only by way of self-inflicted wound from here."
Lentine said that to help Echelon meet demand, it has brought on line an added manufacturing facility that it wasn't planning to use until this fall for the Christmas season.
"We had to rush to get it on line faster," he said. "It's a lot of equipment we're shipping."
But, Lentine said, about 80% of its equipment is on back order.
"People will have to wait a few weeks as we manage this," he said.
Lentine said Echelon secured a large order from Dick's Sporting Goods, and it's developing new products with that retailer. Also, Echelon is working on a purchase order with Amazon that amounts to three times total sales with the online giant last year, he said.
Internationally, Echelon is in about a dozen other countries and expanding that number to 20, Lentine said.
Moving forward as the economy begins to reopen, Lentine said he believes people won't go back to gyms right away and some not at all.
"They're looking for equipment where it's still connected to a trainer," the company president said. "We give them that live trainer experience without leaving their home."
He said membership related to Echelon's bikes have tripled over the last few weeks.
"People are looking for solutions for fitness," Lentine said. "We're able to provide a low-cost solution."
Lentine, a serial inventor and promoter from New Jersey who brought his Viatek Consumer Products to Chattanooga in 2011, created Echelon in 2017 to provide what he calls a more affordable stationary bike with the tracking and interactive features of Peloton and other higher-priced rivals.
With Echelon's bikes sold in stores such as Costco and Walmart, he said the company is trying to appeal to mainstream America.
"We're trying to sell to smaller towns," Lentine said.
Peloton Interactive sued Echelon in federal court in Delaware last year, alleging patent and trade infringement, false advertising and unfair business practices. Lentine has refuted Peloton's lawsuit.
"We're still very confident this will be something we can manage," he said.
Contact Mike Pare at firstname.lastname@example.org. Follow him on Twitter @MikePareTFP.