Home > Latest News > Peloton Interactive, More Losses More Store Closures, 800 Staff To Go

Peloton Interactive, More Losses More Store Closures, 800 Staff To Go

Their costly Martin Place store in Sydney is still open but they have few paying customers, now US Company Peloton Interactive is set to slash jobs and close stores in a desperate effort to cut overheads, it’s the second time these years that the Company has had to slash jobs.

Also set to go are expensive shops similar to their Martin Place store which is failing to attract customers.

Their latest sweeping overhaul includes the cutting nearly 800 jobs will also see the business raise the price for their already expensive Bike+ and Tread machines and outsource all other distribution.

Desperate to generate any sort of publicity due to a lack of marketing dollars, the local subsidiary last week took to spruiking research with their PR Company and local management refusing to answer questions about the business in Australia that is fighting to survive both locally and around the world including in the key US market where the Company first made its name.

Chief Executive Officer Barry McCarthy is hoping to turn around a business that thrived during the early days of the pandemic then crashed after the exposure of Company practises and the sacking of their founder.

Revenue is declining, losses are mounting, and the company’s stock price was down nearly 90% over the past 12 months.

The latest moves are an attempt to reinvigorate sales, boost efficiency and restore some of Peloton’s former cachet claim analysts.

“We have to make our revenues stop shrinking and start growing again,” McCarthy said in the memo provided to Bloomberg, adding that the changes are essential to making Peloton cash-flow positive again. “Cash is oxygen. Oxygen is life.”

The latest cuts are the third known set of layoffs this year, the company will also stop using in-house employees and vans to deliver equipment, they will also use third-party logistics, or 3PL, to set up bikes and treadmills at customer homes.

Peloton is also cutting half of its customer support team.

The company is raising the price of its flagship Bike+ by $700 and its Tread treadmill by $1100 after lowering the price earlier this year in an effort to shift stock.

McCarthy acknowledged the about-face, saying that the April price cuts were necessary to more quickly move units and generate cash flow.

“I probably wouldn’t have messed with the prices at all if I had been confronted with different inventory states back when we lowered the pricing,” he said in an interview.

The price cuts “cheapened at least the perception of the brand,” he said. “So, this is a return to historical positioning.”

In their latest financials it was revealed that Peloton missed analyst estimates — with revenue declining 24% and losses coming in far wider than expected.

Peloton also said it intends to undergo a “significant and aggressive reduction” of its retail footprint beginning in 2023. The company currently operates 86 stores. McCarthy said in the interview that the number of locations shuttered will be determined by negotiations with landlords. He said that the savings from store closures will be reallocated toward marketing and selling its products in other ways.

“We need to be where our customers are when they make purchasing decisions,” McCarthy said in the interview. “Increasingly they do that online,” he said, and that’s reflected in the foot traffic.



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