Peloton's Next Desperate Move

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Peloton Interactive Inc. (NASDAQ: PTON) has been falling apart since current CEO Barry McCarthy joined the company in November of last year. The stock is down 43% in the last 12 months. (These executives pay themselves over $150 million a year.)

Peloton’s new grab at success is an odd one. Peloton and Lululemon have set up a partnership. Peloton will no longer sell its own clothing. Lululemon will no longer sell its own exercise programs. Each of the companies will market co-branded products.

The new program is one of a long line of efforts for Peloton during the COVID-19 pandemic. People were forced to exercise at home. Gyms were empty. Once the virus became less of a health problem, gyms filled up and people cut the use of at-home exercise devices.

Peloton has gone so far as to sell its equipment used, which competes with new models. It began to sell its products on Amazon, next to several competitors. It started to sell its equipment at Dick’s Sporting Goods.

Peloton also set up another distribution channel. It put its equipment in 5,400 Hilton-branded hotels.

Throughout these “innovations,” Peloton has fallen apart financially. In the most recent quarter, revenue fell 4% year over year and 32% quarter over quarter to $642 million. Its net loss was $242 million, compared to $1.3 billion in the same period of last year and $276 million in the previous quarter. It would be unfair to call that real progress.

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