Fitness instrument manufacturer Peloton Interactive, Inc (PTON) is ready to take another drastic cost-cutting measure after it was reported that the brand is going to close multiple stores. The company, according to an article by CNBC, is ready to halt the production of multiple top-of-the-line products in the wake of waning demand.
The company has already stopped the production of Bike + last December, a connected instrument that helped the company reap high rewards during the early days of the pandemic. The company does not plan to restart the production of Bike + till June. It will also not make any more Treads for six weeks starting from February. The Tread+ might not be back to the product lineup for the entire year since its recall in 2021. The Bike is also going to go out of production for February and March.
The proposal was placed back on January 10 in a secretive meeting where the company understood that the pricing of their products is not attracting the customers and that there are multiple competitors in the market. According to the report, the company miscalculated the extent of the virus’s effect and has made more products than the market requires. Now there are thousands of products that are yet to sell and therefore the break in production is going to be implemented to ease its inventory.
The company has hired a management firm to manage its costs and bring sustainability to the company. On the market, the stock has already lost 80% or $40 billion of its market shares, and recently, a company research firm has found out that the top brass of the company has sold close to $500 million in stock when the time was better for the company.
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