Peloton Interactive Inc shares rallied up to 6.8 percent on Tuesday after announcing plans to cease in-house production and rely solely on partners for production, marking one of the exercise equipment company’s most dramatic steps yet to simplify its operations and reduce costs.
The move is an about-face from Peloton’s strategy over the past three years, when it split manufacturing between its own facilities and partners. The company built a portion of its standard Bike models and the higher-end Bike+ using facilities it acquired in 2019 as part of buying Tonic Fitness Technology Inc (期美科技). It also relied on Taiwan-based manufacturing
Peloton said it's expanding its partnership with Taiwanese company Rexon Industrial Corp., which will become the primary manufacturer of its bike and treadmill products.
Exercise equipment maker Peloton Interactive said on Tuesday it will cease in-house production of its bikes and treadmills and move manufacturing to partners in an effort to simplify its operations and reduce costs.
Peloton will stop making its own bikes and treadmills, a drastic change for the struggling company aimed at cutting costs and ensuring its ability to remain afloat.