Peloton will stop building treadmills and bikes in-house to reduce costs
Peloton has announced it will completely out-source the production of its bikes and treadmills to Taiwanese manufacturer Rexon. The fitness company currently builds some of its hardware in-house, but says out-sourcing will allow it to reduce costs and simplify its supply chain.
It’s the latest move by recently-installed CEO Barry McCarthy to right Peloton’s troubled ship. As a fitness firm focused on delivering home workouts, the company was a natural pandemic darling. But founder and former CEO John Foley overestimated demand for its products, and saw sales, subscribers, and stock plunge as the company was left burdened with surplus inventory. Its most recent earnings showed losses of some $757 million.