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Peloton Takes a Ride with Amazon to Expand Distribution

Updated: Sep 27

August 30, 2022

 


On August 24, 2022, Peloton announced that select products are now available for purchase in Amazon U.S. stores, marking a significant shift in the company’s retail strategy. Prior to this announcement, the well-known home fitness company sold its equipment and accessories exclusively through its e-commerce site.


The announcement comes at a time when Peloton is facing significant challenges. The company became a success story at the height of the COVID-19 pandemic due to its offering of home fitness solutions such as spin bikes, treadmills, and on-demand workout classes. However, as the effects of the pandemic began to subside, Peloton’s popularity declined. Indeed, the reopening of gyms and fitness studios forced Peloton to make sweeping changes to its business model.


The decision to partner with Amazon is one of many changes made since the appointment of new Chief Executive Officer, Barry McCarthy, in February of this year. In 2022 alone, Peloton laid off more than 4,000 employees worldwide and began outsourcing production of its fitness equipment to third parties. Further, the company announced in early August that it will be raising prices and shutting down storefronts in an effort to improve cash flow.


Immediately following the announcement of the Amazon partnership, Peloton’s shares rose 17%, suggesting that investors are optimistic about the decision to expand distribution channels. Given the reports earlier this year about a potential acquisition by Amazon or Nike, it will be interesting to see what the future has in store for this pandemic darling stock.


Author: Jennifer Linde


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