Peloton’s Next Desperate Move

By Douglas A. McIntyre Published Sep 28, 11:30AM EDT

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Peloton’s Next Desperate Move — © Kevork Djansezian / Getty Images News via Getty Images

Peloton Interactive Inc. (NASDAQ: PTON) has been falling apart since current CEO Barry McCarthy joined the company in November of last year. The stock is down 43% in the last 12 months. (These executives pay themselves over $150 million a year.)

Peloton’s new grab at success is an odd one. Peloton and Lululemon have set up a partnership. Peloton will no longer sell its own clothing. Lululemon will no longer sell its own exercise programs. Each of the companies will market co-branded products.

The new program is one of a long line of efforts for Peloton during the COVID-19 pandemic. People were forced to exercise at home. Gyms were empty. Once the virus became less of a health problem, gyms filled up and people cut the use of at-home exercise devices.

Peloton has gone so far as to sell its equipment used, which competes with new models. It began to sell its products on Amazon, next to several competitors. It started to sell its equipment at Dick’s Sporting Goods.
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Peloton also set up another distribution channel. It put its equipment in 5,400 Hilton-branded hotels.
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Throughout these “innovations,” Peloton has fallen apart financially. In the most recent quarter, revenue fell 4% year over year and 32% quarter over quarter to $642 million. Its net loss was $242 million, compared to $1.3 billion in the same period of last year and $276 million in the previous quarter. It would be unfair to call that real progress.
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When earnings were released, McCarthy commented, “Not since I stepped into the CEO role have we had as many new irons in the fire to drive both short- and long-term growth.” None of these has worked, and neither will the new one.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.