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Saturday, May 18, 2024

Peloton May Restructure After Nightmare 2021

  • Peloton is bringing in consulting firm McKinsey as it looks to rebound from a challenging 2021.
  • The company announced product price hikes.
Peloton
Peloton/Design: Alex Brooks

Change is coming to Peloton after a brutal 2021.

The at-home fitness giant is bringing in consulting firm McKinsey & Co. to evaluate its cost structure and potentially eliminate jobs.

Job cuts were reportedly discussed among Peloton’s management team, with the apparel division especially under scrutiny due to tepid sales. Employees at the company’s 123 retail locations (as of June 30) may have to take customer service calls, and 15 stores could close.

The company also announced added delivery and setup costs for its bike and treadmill products, citing inflation.

  • Starting Jan. 31, Peloton is adding respective $250 and $350 charges for its Bike and Tread products in the U.S. and Canada, bringing their total costs to $1,745 and $2,845.
  • In the U.K., Germany, and Australia, the company is simply raising prices on those models without breaking out the delivery fee.
  • The charges partly reverse an August 2021 price drop on the Bike from $1,895.

The company’s $39-per-month subscription price will remain unchanged for now.

A Year to Forget

Peloton is seeking to reverse a slide brought on by a treadmill recall, two consecutive quarters of slipping revenue, multiple legal battles — including one with Lululemon — and a recent drop in Google searches for its products.

The company reported a net loss of $376 million in fiscal Q1 2022, compared to a $49.8 million loss in the same period a year prior.

Peloton’s stock dropped 76% over the course of 2021 and is already down around 14% this year.

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