NEW YORK (BRAIN) — Peloton Interactive said Tuesday that it will cease all owned manufacturing operations and expand its relationship with Taiwan's Rexon Industrial Corp.
The subscription-based exercise bike company said it is a "natural progression" in strategy to simplify its supply chain and focus on technology and content.
"We believe that this along with other initiatives will enable us to continue reducing the cash burden on the business and increase our flexibility," said Peloton's Barry McCarthy, who was named CEO in February, succeeding co-founder John Foley. "Partnering with market-leading third-party suppliers, Peloton will be able to focus on what we do best: using technology and content to help our seven million members become the best versions of themselves."
Rexon will become the primary manufacturer of the hardware for Peloton's Bike and Tread product lines. Peloton also will suspend operations at its Tonic Fitness Technology Inc. facility through the remainder of the year. Peloton acquired Tonic in 2019.
Peloton Chief Supply Chain Officer Andy Rendich said Peloton plans to maintain a corporate and manufacturing presence in Taiwan.
"We are thrilled to be expanding our relationship with Peloton as the company reaffirms its commitment to Taiwan," said Rexon CEO Rex Wang. "For years, Rexon has worked side by side with Peloton to produce the hardware behind its iconic and industry-leading products. We are grateful for the opportunity to play an even greater role in the company's manufacturing and look forward to continued collaboration in the future."
Peloton has experienced declining sales coming out of the pandemic. To reduce costs, the company announced in February that it would back off plans to develop domestic manufacturing and eliminate 2,800 jobs globally.
