Peloton Interactive Inc PTON-Q said it would start selling its exercise bike and other fitness accessories on e-commerce giant Amazon.com Inc’s AMZN-Q U.S. platform in a bid to combat a slowdown in sales from pandemic heights.
The news sent shares of the fitness equipment maker up about 18 per cent to $13.22 in morning trade on Wednesday. The stock has lost more than half of its value this year as Peloton’s exercise bikes and treadmills went out of fashion after lockdowns ended and people returned to gyms.
Peloton’s exit from selling exclusively through its own e-commerce site and global showrooms marks Chief Executive Barry McCarthy’s latest gambit to attract more customers, cut losses and improve cash flow.
Under the former Netflix Inc executive, Peloton has also cut hundreds of jobs, shuttered stores and outsourced delivery to third parties to cut costs since warning of a cash crunch in May.
“Amazon’s Prime subscriber base is an extremely attractive potential customer base for Peloton. Plus, Prime benefits including fast shipping and subsidized promotional spend would help Peloton in improving its customer experience and unit economics,” MKM Partners analyst Rohit Kulkarni said.
The company has been struggling to boost its membership. In the latest quarter, it added about 200,000 customers who paid a monthly fee to access classes, nearly half of the year before.
Peloton said delivery of the “Bike,” priced at $1,445 and a major contributor to its revenue, would be available to most of the United States. The pricier Bike+, however, will not be sold on Amazon.
Wednesday’s announcement comes months after Reuters reported that the company had drawn buyout interest from Amazon, which has been active in the M&A space this year.
McCarthy also roped in former Amazon exec Coddington as chief financial officer in June.
Peloton will also sell accessories such as mats and dumbbells on the e-commerce platform, starting Wednesday.
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