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Peloton’s new CEO has a plan to fix the company

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Peloton is considering a number of options to turn the business around.

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New


Interactive Platoon

CEO Barry McCarthy is testing membership options in his effort to turn around the fitness company. A look at the stock suggests investors aren’t buying yet.

The company on Thursday unveiled One Peloton Club, a limited offer that promises its flagship bike as a subscription option, rather than an upfront purchase. The company said the offering will be available at physical locations in Texas, Florida, Minnesota and Denver. If a customer wishes to cancel, Peloton (ticker: PTON) takes the bike back and delivery costs are non-refundable. A member of the One Peloton Club can then decide to buy the bike directly.

The Wall Street Journal first reported on the plan, adding that the limited offer would be between $60 and $100 per month for the bike and subscription.

“Peloton has created a limited pilot program in select U.S. markets to explore various pricing models and options for new members,” Peloton said in a statement emailed to Barrons.

Peloton stock is down 5% at $22.24 in Thursday afternoon trading amid a decline in broader markets. the


S&P500
and


Nasdaq Compound

decreased by 1.3% and 2.0%, respectively. Shares of the connected fitness company have fallen 38% in 2022 and lost 81% of their value from 12 months ago.

McCarthy replaced John Foley as CEO last month after the co-founder stepped down in the role of executive chairman. McCarthy is tasked with turning the company around after his spending amid pandemic demand backfires. He told the Journal that Peloton plans to test new offerings and strategies, much like


netflix

(NFLX) has in the past. McCarthy was previously CFO of both


netflix

and


Spotify Technology

(


SQUARE

).

Peloton is making a bigger shift to emphasize its digital content and offerings. The Journal report references other options being considered, such as a social media platform and partnerships to put Peloton classes on non-Peloton exercise equipment or allow outside content on the bike tablet. of Platoon.

The stock sold off in January as it became clear the company was grossly overestimating demand amid the economic reopening. In late January, the company came under pressure from activist investor Blackwells Capital to pursue a sale.


Apple

(AAPL),


Amazon.co.uk

(AMZN), and


Nike

(NKE) were among the companies proposed as potential suitors. But McCarthy told the Journal that insiders who control 70% of Peloton’s voting shares have agreed to postpone talks about selling the company while he attempts his turnaround plan.

Write to Connor Smith at [email protected]