As part of its cost-cutting strategy, Peloton plans to raise prices on some products, eliminate warehouses in North America, close stores, and reduce staff.
The exercise bike maker, which has seen great success during the pandemic but has only suffered from excess inventory as people return to the gym, has been shrinking its retail footprint and ending its last-mile delivery network. and rely on partners instead, saving about 784 jobs. said in a statement. He did not say how many of his 86 stores in North America will be closed.
“These are difficult choices because we impact people’s lives,” Peloton CEO Barry McCarthy said in a memo to employees seen by The New York Times. “These changes are essential for Peloton to be cash flow positive.”
The company will make that report. Q4 earnings August 25th.
After cutting prices on some of its products in April, Peloton announced on Friday that it will raise the prices of its Bike+ models by $500 and its Tread models by $800.
The company will also require employees to return to the office at least three days a week on Nov. 14.
Peloton announced last month that it would outsource manufacturing to an overseas company. In February, Peloton founder John Foley stepped down as CEO and was replaced by McCarthy. The company laid off his 20% of its workforce, about 2,800, that month.
The company experienced a surge in demand in the spring of 2020, becoming a pandemic darling before interest waned as gyms reopened. This year, Peloton temporarily halted production of bicycles and treadmills, increasing losses.
Negative portrayals on television also impacted the stock. In December, Mr. Big, a character on the revival show Sex and the City, died after working out on a Peloton bike. Then Showtime, the protagonist of his drama Billions, suffered a heart attack while riding his motorcycle in the Peloton at the Season 6 premiere.
“Overall, I remain optimistic about Peloton’s future,” McCarthy wrote in an employee memo. “That doesn’t mean there won’t be challenges ahead. There will be unexpected setbacks.
