Calling the change a “pure development” in an announcement Tuesday, Peloton mentioned Taiwanese producer Rexon Industrial Corp. will grow to be the first producer of its train tools sooner or later. Consequently, Peloton will shut down its factories operated by Tonic Health Know-how, an organization it purchased in 2019.
“We consider that this together with different initiatives will allow us to proceed lowering the money burden on the enterprise and enhance our flexibility,” mentioned CEO Barry McCarthy in a press launch.
Different items of its tools, together with touchscreens and an upcoming rowing machine, may also be outsourced.
Peloton’s struggles
Peloton mentioned in Could that it had simply $879 million in money within the financial institution on the finish of the quarter, which has left it “thinly capitalized,” McCarthy mentioned. That pressured the corporate to borrow $750 million in five-year time period debt from Wall Avenue to maintain its operations working.
Peloton shares rose about 1% in early buying and selling. The inventory is down about 95% from the all-time excessive it reached in late 2020.
