In a further turnaround, the sporting goods specialist Peloton outsources the entire production of equipment to its contract manufacturer. The New York company recently built some of its fitness bikes and treadmills itself. Handing over the production entirely to the Taiwanese manufacturer Rexon will simplify the supply chain and give the company more leeway in terms of costs, explained company boss Barry McCarthy. The shares then rose.
Peloton had benefited greatly from gym closures early in the pandemic. Sales of the New York-based company’s training bikes and treadmills soared, and some interested parties had to wait a long time for their equipment. However, Peloton did not interpret the boost as a special boom, but as the beginning of a growth era and invested in the expansion of capacities up to the construction of a factory in the USA.
That turned out to be a serious miscalculation: With the lifting of corona restrictions, interest in the company’s devices decreased again, Peloton was sitting on high inventories, and construction of the factory in the USA was canceled again. Most recently, Peloton posted a quarterly loss of $757 million. McCarthy, a former chief financial officer of streaming giants Netflix and Spotify, is trying to emerge from the crisis with a focus on software and subscriptions. Investors welcomed the complete outsourcing of production with a price increase of almost four percent in early US trading. (dpa)