Controversial stationary bike seller Peloton has partnered with Amazon to recover lost profits after the pandemic darling fell out of favor with consumers over the past year due to the easing of COVID restrictions.
Peloton Brass announced the deal that will see some of its fitness equipment sold from the online retailer on Wednesday, raising the company’s stock price by 17 percent before the opening bell.
The move comes as the fitness giant’s first attempt to sell to third parties after maintaining a direct-to-consumer model for the past decade, and as the company tries to recover a 90 percent loss of its share price after gyms reopened this year.
Meanwhile, management told workers Friday that they are cutting 784 jobs, raising equipment prices, closing retail locations and requiring employees to return to the office by November as they try to secure their profits.
Starting Wednesday, the company will offer a selection of its affiliate fitness equipment and accessories on its website in the US only, including the original Bike, which costs $1,445.
The announcement also comes just a day before Peloton is expected to report its fourth-quarter fiscal results on August 25.
The controversial stationary bike seller Peloton has partnered with Amazon to sell its fitness equipment through the online retailer. Previously, the company — whose stock price has been wiped out 90 percent in the past year with gyms reopening — maintained a direct-to-consumer model. Pictured is a Peloton store in Walnut Creek, California
The move marks the latest move by the fitness company’s chief executive, Barry McCarthy, to expand its consumer base and increase cash flow.
“We need to make sure our revenues stop shrinking and start growing again,” the former Spotify CFO wrote in a memo to staff announcing that there will be nearly 800 layoffs and the halt of all hiring across the company. .
‘Cash is oxygen. Oxygen is life,” wrote McCarthy, a tech veteran who took over the company in February after a tumultuous end to former CEO John Foley’s time at the company.
He added that he hopes the decisions will “better position the company for long-term success.”
Foley resigned amid a storm of controversy and falling stock prices after Peleton’s sales — which jumped about 200 percent during the first year of the pandemic — slowed significantly as athletes returned to the gym in droves.
Peloton makes other changes, including a return to personal work.
Office workers will be required to come at least three days a week beginning Sept. 6, McCarthy said Friday.
This kind of return is in line with the approach taken by other tech companies, such as Apple, but marks a sharp turn for a company that took advantage of the work-from-home lifestyle.
CEO McCarthy (left), a former Spotify and Netflix executive, pledged to cut costs, improve Peloton’s products and increasingly move to a subscription model.
Today’s massive series of announcements comes six months after McCarthy was named CEO in a broader management reshuffle.
The former Spotify and Netflix CEO promised to cut costs, improve Peloton’s products and increasingly switch to a subscription model.
The company ended the quarter with $2.96 million affiliate fitness subscribers, who are people who own one of the company’s products and pay for a membership to its live and on-demand workout classes.
. Source: Dailymail