Peloton founders exit in latest shake-up

Peloton Interactive executive chairman and co-founder John Foley is stepping down from the fitness company as part of a leadership shake-up, extending the turbulence at a business trying to pull out of a deep slump.

Foley, who helped start Peloton in 2012 and served as chief executive officer for 10 years, is resigning effective Monday, the company said in a statement. Foley took the executive chairman role in February when he handed the reins to CEO Barry McCarthy, a veteran of Spotify Technology and Netflix.

Chief Legal Officer Hisao Kushi, another co-founder, is also headed for the exits. He’ll be replaced in that role by Tammy Albarran, who Peloton recruited from Uber Technologies. The chairman role, meanwhile, will be filled by Karen Boone, a former Restoration Hardware executive who currently serves as lead independent director.

Peloton investors initially applauded the changes, sending the shares up as much as 5.3 per cent to $US11.64 in extended trading on Monday. But the rally soon evaporated, with the stock declining more than 2 per cent.

The reshuffling extends a year of upheaval at New York-based Peloton, which thrived in the early days of the pandemic but is now suffering from declining sales and mounting losses. Its shares are down about 90 per cent over the past year, and the company has struggled to work through a glut of inventory.

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As part of a turnaround plan, McCarthy has cut thousands of jobs and offloaded operations to third-party providers. But Peloton’s quarterly report in August signalled that his comeback effort has a long way to go.

McCarthy’s goal is to make Peloton cash-flow positive in the second half of the coming fiscal year. “We continue to make steady progress, but we still have work to do,” he said last month, while acknowledging that the company’s financial performance may cause some to doubt the “viability of the business.”

With Peloton’s longtime CEO now out of the picture, McCarthy may have a freer hand to make changes. The executive has said the company should prioritise its digital offering over hardware and is exploring allowing subscribers to beam content from their smartphones to non-Peloton fitness equipment.