Aug 12 (Reuters) – Peloton Interactive Inc (PTON.O) said on Friday it would cut jobs, shut stores and raise prices on its exercise equipment including treadmills and top-end bikes as it undertakes a company-wide revamp to shore up its revenue and improve cash flow.
Shares of the company surged about 11% in afternoon trade after the company said in a memo it would cut about 800 jobs and reduce its retail presence in North America.
Under Chief Executive Officer Barry McCarthy, Peloton has implemented a slew of measures including cost cuts to steady its business as a pandemic-driven demand for its treadmills and exercise bikes quickly fizzles.
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On Friday, the company outlined a plan to aggressively reduce its retail presence in the United States and eliminate a number of jobs in warehouses and customer support teams.
Shifting final mile delivery to third-party logistics providers will reduce per-product delivery costs by up to 50%, McCarthy said in the memo seen by Reuters.
The company is also raising prices of its Bike+ and Tread machines in five markets, including the United States and Canada. (https://bit.ly/3peZhNv)
The company, which lowered the prices for its products earlier this year, said it would now raise prices by $500 to $2,495 on Bike+ and by $800 to $3,495 on Tread in the United States.
McCarthy, a former Netflix Inc (NFLX.O) executive, said he was aiming to boost Peloton’s software engineering team, terming it as “right investments” to drive growth.
($1 = 1.2782 Canadian dollars)
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Reporting by Nathan Gomes and Kannaki Deka in Bengaluru; Additional reporting by Deborah Sophia; Editing by Krishna Chandra Eluri and Anil D’Silva
Our Standards: The Thomson Reuters Trust Principles.
A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO at the Nasdaq Market site in New York City, New York, U.S., September 26, 2019. REUTERS/Shannon Stapleton
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Feb 4 (Reuters) – Peloton Interactive Inc (PTON.O) has drawn interest from potential buyers including e-commerce giant Amazon.com Inc , according to a person familiar with the matter, as the exercise bike maker struggles to maintain pandemic-fueled growth.
Shares of Peloton surged 30% in extended trading on the news, which comes days after activist investor Blackwells Capital urged the company’s board to put it up for sale.
Amazon is exploring an offer for Peloton and is speaking with advisers about whether and how to proceed, a source said. Peloton has not yet decided whether it will explore a sale, according to the source.
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Meanwhile, the Financial Times reported late on Friday that sportswear company NikeInc is also evaluating a bid for Peloton, citing people briefed on the matter, who said the considerations are preliminary and Nike has not held talks with Peloton.
Peloton and Nike did not immediately respond to a Reuters request for comment, while Amazon declined to comment.
Peloton’s sales boomed during COVID-19 lockdowns, with many snapping up home fitness equipment. But its fortunes began to fade as vaccinations increased, gyms reopened and rivals offered competitive products.
In November, it hinted that demand for its exercise bikes and treadmills was slowing faster than expected, and its market capitalization since then has shrunk to about $8 billion from a peak of nearly $52 billion in early 2021.
If the stock’s gains hold on Monday, Peloton could reach the $10 billion market-capitalization threshold.
Last week, Blackwells Capital called on the board of Peloton to remove CEO John Foley immediately, accusing him of deals that set high fixed costs and for holding on to excessive inventory, while misleading investors about the need to raise capital. read more
Blackwells criticized Foley for hiring his wife as a key executive and committing to a 300,000-square-foot, 20-year lease for office space in New York, among other things.
The investment firm, run by Jason Aintabi, has also urged the board to put the company up for sale to a buyer like Walt Disney Co (DIS.N), Apple Inc (AAPL.O), Sony Group (6758.T) or Nike Inc , Reuters reported on Sunday. read more
Peloton has tried to cushion the blow to its growth by cutting the price of its popular bike and ramping up its ad spending, but growth remains stagnant.
Last month, Peloton said the company was reviewing the size of its workforce and “resetting” production levels, following a report that it was temporarily halting production of connected fitness bikes and treadmills after a significant drop in demand. read more
While many investors have become frustrated with Peloton due to a steep drop in its share price, analysts also note that the company may be a difficult acquisition target because of its two classes of stock, effectively allowing insiders to control it.
The news was first reported by the Wall Street Journal. (https://on.wsj.com/3AVMIf7)
The growth in the fitness band market has prompted tech giants such as Apple Inc (AAPL.O) and Samsung (005930.KS) to introduce features for health tracking, including electrocardiogram and blood pressure sensor. Alphabet Inc-owned Google (GOOGL.O) closed its acquisition of fitness tracking company Fitbit Inc in January.
Tech giants including Amazon and Alphabet have also seen a rise in their valuation after blockbuster results this week. A day after Facebook owner Meta Platforms (FB.O) suffered the deepest loss of stock market value in history for a U.S. company, Amazon logged the greatest ever one-day increase in value. read more
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Reporting by Rithika Krishna, Tiyashi Datta, Nivedita Balu and Shivam Patel in Bengaluru and Greg Roumeliotis in New York; Editing by Devika Syamnath, Peter Henderson, Anil D’Silva and Kim Coghill
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Jan 20 (Reuters) – Peloton Interactive Inc’s (PTON.O) chief executive said on Thursday the company was reviewing the size of its workforce and “resetting” production levels, following a report earlier in the day that it was temporarily halting production of connected fitness bikes and treadmills after a significant drop in demand.
Shares in the exercise bike maker, once a pandemic darling, closed down 24% at about $24, wiping off nearly $2.5 billion in market value.
“We now need to evaluate our organization structure and size of our team,” CEO John Foley said. “And we are still in the process of considering all options … to make our business more flexible.”
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According to the CNBC report, Peloton, in a confidential presentation dated Jan. 10, said it had seen a “significant reduction” in demand and that it planned to pause bike production in February and March. It also won’t manufacture the Tread treadmill machine for six weeks, beginning next month.
A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO at the Nasdaq Market site in New York City, New York, U.S., September 26, 2019. REUTERS/Shannon Stapleton/File Photo
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“Rumors that we are halting all production of bikes and Treads are false,” Foley said.
Peloton earlier in the day said it was taking “significant corrective actions” to improve its profitability and estimated second-quarter revenue to be about $1.14 billion, compared with its previous forecast of $1.1 billion to $1.2 billion.
The company has seen a slump in demand for its fitness classes and equipment as people venture out of their houses to hit gyms again following gradual easing of pandemic-related curbs. read more
“During the pandemic, there was too little supply to meet the growing demand. Unfortunately, the company took those cues to bulk up supply just as demand began to falter,” BMO Capital Markets analyst Simeon Siegel said.
Peloton has been working with consulting firm McKinsey & Co for a review of its cost structure and could cut jobs, CNBC reported earlier this week. read more
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Reporting by Kannaki Deka and Akanksha Khushi in Bengaluru; Additional reporting by Nathan Gomes, Aishwarya Nair and Akriti Sharma; Editing by Vinay Dwivedi, Sriraj Kalluvila and Shounak Dasgupta
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Conservative Party leader Erin O’Toole speaks during an election campaign visit to North Vancouver, British Columbia, Canada September 3, 2021. REUTERS/Jennifer Gauthier
VANCOUVER, Sept 4 (Reuters) – The head of Canada’s opposition Conservative Party, who has a chance of beating Prime Minister Justin Trudeau in an election, on Saturday pushed back against charges he plans to weaken gun controls, an issue that could prove costly.
Conservative leader Erin O’Toole has been pressed repeatedly this week over his campaign promise to overturn a 2020 ban on weapons such as the AR-15, used by a gunman to kill 26 adults and children in the U.S. 2012 Sandy Hook massacre.
O’Toole declined to answer the questions directly, noting he plans to keep a separate 1977 ban on assault rifles.
“Erin O’Toole is willing to say anything to Canadians to get elected. He lied to Canadians about his plans to scrap the Liberal ban on assault weapons,” the Liberals said in a statement on Saturday.
Gun control is a sensitive issue in Canada, especially in the wake of a number of high-profile killings. In April 2020 a man killed 22 people in a rampage in the province of Nova Scotia, shooting 13 of them.
Liberal governments have over the years tightened gun control laws, which are stricter than those in the United States. Some Conservatives complain the measures are too restrictive and needlessly penalise farmers and hunters.
“It’s very upsetting to see Mr. Trudeau trying to import American-style politics, particularly on an issue of public safety,” O’Toole told reporters in Vancouver, saying a big problem was weapons being smuggled in from the United States.
O’Toole is also promising a review of how weapons are classified as dangerous in Canada.
The 2020 ban affected 11 categories of assault rifles and other weapons, including the Ruger Mini-14 rifle, used in a 1989 Montreal mass shooting in which 14 women were killed.
Trudeau called the Sept. 20 snap election, two years earlier than scheduled, on the grounds he needed public approval for his plans to deal with the COVID-19 pandemic. But amid unhappiness with the call and voter fatigue, he is slipping.
An Ekos poll on Saturday put the Conservatives on 35% public support with the Liberals on 28.8% and the left-leaning New Democrats on 19.6%, enough to give O’Toole a minority administration and end six years of rule by Trudeau.
Reporting by David Ljunggren in Vancouver
Editing by Matthew Lewis
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