Peloton is hoping a tie-up with Amazon can recapture some of the buzz the fitness platform generated during the height of the Covid pandemic. The connected fitness company now sells its flagship exercise bike, “Guide” camera technology and an assortment of apparel and accessories through a new store on Amazon’s U.S. marketplace.
The partnership is a major first for Peloton, which has never worked with another retailer to sell its merchandise. Until now, the company relied exclusively on its own website, inside sales channels and physical showrooms.
Apparel sold through Amazon will include an assortment of Peloton-branded activewear including sports bras, tanks, leggings, shorts, hoodies, joggers and hats.
“Expanding our distribution channels through Amazon is a natural extension of our business and an organic way to increase access to our brand,” Peloton chief commercial officer Kevin Cornils said in a statement. “We want to meet consumers where they are, and they are shopping on Amazon. Providing additional opportunities to expose people to Peloton is a clear next step, as we continue to generate excitement for our unparalleled connected fitness experience.”
Apparel was expected to be a $150 million business for Peloton in the 2022 fiscal year, according to internal company reports, down from a prior forecast of more than $200 million.
As Peloton continued to evolve, CEO and president Barry McCarthy noted in a May earnings call that the company was in discussions with “several potential retail partners,” indicating that the next step for the firm was to expand distribution channels. Peloton, which has sought to shore up growth in its 7-million member base, believes a new channel could attract new customers. McCarthy reaffirmed in May that Peloton could reach its 100-million-member goal.
Amazon, along with Nike, was previously said to be interested in possibly acquiring the exercise-bike brand.
“We are thrilled to have Peloton products available for our customers in Amazon stores,” Jim Adkins, vice president of recreational and vocational categories at Amazon, said in a statement. “Peloton is all about bringing their community and energizing fitness routines into the home. With Amazon’s convenient shopping experience, we hope to further that mission by providing customers with high quality, innovative products to take their health and fitness to the next level.”
Investors loved the move, sending Peloton’s stock up more than 15 percent in Wednesday morning trading. Like many high-growth tech companies that saw success during the pandemic and drove strong valuations, Peloton’s stock has plummeted more than 92 percent from its peak of $171.09 per share in January 2021.
Today’s Peloton—and what will be seen in the future—already looks quite different from the company that became a household name in 2020.
In February, Peloton replaced its CEO and co-founder John Foley with McCarthy, previously the chief financial officer at Spotify and Netflix. When the CEO switch was announced, the company also said it was cutting 2,800 jobs worldwide, or 20 percent of its workforce at the time. Additionally, the company scrapped plans to build a new $400 million production facility in Ohio.
Under McCarthy, Peloton also discontinued all in-house manufacturing in July, instead opting to expand its current relationship with Taiwanese manufacturer Rexon Industrial to outsource bike and treadmill production.
Just last month, Peloton told employees it was cutting another 780 jobs, and will close an undisclosed portion of its 86 retail locations. The “aggressive” reduction will begin in 2023, with the pace of closures depending on how quickly Peloton can negotiate getting out of leases.
Peloton also said it will exit last-mile logistics by closing its remaining warehouses and shifting delivery work to third-party providers, resulting in a portion of the newest job cuts. It is also trimming a number of positions in its in-house support team, which are mainly in Tempe, Ariz., and Plano, Texas, and instead will rely on third parties.
The companywide cost cuts should save $800 million this year.
In May, Peloton got a major capital infusion, signing a binding commitment letter with JPMorgan and Goldman Sachs to borrow $750 million in five-year term debt, according to McCarthy.
As part of the new Amazon experience, the Peloton Bike will be available with in-home delivery, and customers have the option to assemble the bikes themselves or select an add-on expert assembly option, which is available in most of the U.S. at no additional cost.
Whether the move will turn things around for Peloton is still anyone’s guess. While brands like Adidas, Levi’s, Calvin Klein and The North Face are among many brands with their own storefronts on the e-commerce giant’s marketplace, companies including Nike and Birkenstock have quit Amazon. Both questioned about Amazon’s willingness to curb counterfeiting at the time. Nike, for one, pivoted away from wholesale to prioritize selling directly to consumers
Peloton will report fourth-quarter earnings on Thursday.