Peloton Isn’t for Sale, May Lower Pricing, New CEO Says

Peloton CEO Barry McCarthy said the company isn’t for sale in the “foreseeable future,” as the company looks at possibly lowering its pricing and released a new virtual reality game for its connected bikes. (Photo courtesy Peloton.)

After speculation of a sale of Peloton, layoffs of 2,800 people, cancellation of its first U.S. plant and a change in the CEO, the new CEO of Peloton, Barry McCarthy, said the company is not for sale for “the foreseeable future,” he told the Financial Times in mid-February. However, McCarthy added that shareholders of the public company would have the final say on a sale.

Later in the month, he told CNBC host Jim Cramer that he is reviewing pricing of the company’s products to try to expand the customer base and increase revenue.

Speculation was that McCarthy had been brought in to prepare Peloton for a sale, but McCarthy said he wouldn’t be moving from California to New York if he was brought in just to prepare the company to be sold.    

His goal is to make Peloton more than a bike company—he intends to make it a connected fitness company, he told the Financial Times.

McCarthy came from Netflix and Spotify, which offer digital streaming services and subscription business models.

McCarthy shared with CNBC host Jim Cramer on Feb. 23 that he is looking at the pricing of Peloton’s products as well as the $39 per month membership fee to help grow its customer base.  

“I think there’s enormous opportunity for us to flex the business model and dramatically increase the TAM (total addressable market) for new members by lowering the cost of entry and playing around with the relationship between the monthly recurring revenue and the upfront revenue,” McCarthy said in the interview.

The company recently introduced Peloton Lanebreak, its first gaming-inspired experience, for its Bike and Bike+. The game allows all-access members to speed along a six-lane track while music plays, using the resistance knob to change lanes.

Peloton reportedly will introduce a connected rower and a new strength product to go with its bikes and treadmills.

Its plans to open a studio in New York City and one in London later this year appear to still be on, according to its Homecoming event website page, but the company halted production of what would have been its first dedicated Peloton factory in the United States, which had been planned to open in Ohio in 2023, then delayed to 2024 due to inventory backlog before being cancelled. The company will finish building the plant but will then sell the building and property, a Peloton spokesperson told the Toledo Blade.Club NewsIndustry News