Peloton Interactive Inc has said its co-founder John Foley and other senior management are leaving the company in a shake-up as the maker of connected exercise equipment pedals hard to turn itself around, the Wall Street Journal reported.
Foley, who led the company for most of its 10-year existence, stepped down as CEO in February but remained executive chairman of the board. He resigned on Monday, the company said in a statement and will be succeeded as board chair by Karen Boone, a former executive at Restoration Hardware and a Peloton board member since 2019.
Foley, a former Barnes & Noble executive, co-founded Peloton in 2012 and holds supervoting shares that give him outsize control. As of October 2021, he owned shares that gave him nearly 40% of the voting power, securities filing show, the Wall Street Journal said.
The shake-up, announced by Barry McCarthy - who took over as CEO in February - comes weeks after Peloton reported a $1.2 billion quarterly loss and a nearly 30% drop in revenue. McCarthy warned investors in August that the business would likely spend more cash than it brings in for several more months.
READ: Peloton Interactive posts losses of more than $1.2 billion in its fiscal fourth quarter as revenue plunges
Peloton has struggled with deepening losses this year after a pandemic-fueled spike in demand for its at-home workouts left the company with a glut of unsold bicycles when consumers returned to gyms and outdoor activities. The company’s shares have plunged by more than 90% over the past year.
With fewer people buying new Peloton machines, the new CEO has experimented with lowered prices and bike rentals as well as trying to get people who don’t have Peloton bikes or treadmills to pay a monthly subscription for the company’s online fitness classes.
Peloton also said on Monday that its chief legal officer, Hisao Kushi, and chief commercial officer, Kevin Cornils, are also leaving. The company said it has hired Tammy Albarrán, a deputy general counsel from Uber Technologies Inc to succeed Kushi starting in October.
Other longtime Peloton executives, including co-founder William Lynch, who was president, and Foley’s wife, Jill Foley, who oversaw a push into apparel, left in February this year.
Peloton began selling bikes in 2014 and opened its first studio in Manhattan in which instructors led classes that were also streamed into members’ homes. It went public in September 2019. The company has about three million people who subscribe to its online fitness service, but the subscriber gains have stalled.
Peloton’s shares, which traded as high as $160 per share in late 2020, closed Monday at around $11.00. Its market capitalization has fallen below $4 billion from a peak of nearly $50 billion.
Contact the author at jon.hopkins@proactiveinvestors.com