Peloton says co-founders John Foley and Hisao Kushi are leaving the company
Peloton, the beleaguered fitness company, on Monday said co-founders John Foley and Hisao Kushi are stepping down from the company.
The executive departures come one month after Peloton said it was cutting almost 800 jobs and closing stores as it sought to trim costs and improve its financial situation.
In a statement, Peloton said Foley, the former CEO of Peloton, resigned from his current role as executive chairman of the board effective Monday, while Kushi will leave his role of chief legal officer effective October 3. In February, Foley stepped back from his CEO role amid slowing growth at the company.
Foley said in a statement that "it is time for me to start a new professional chapter. I have passion for building companies and creating great teams, and I am excited to do that again in a new space."
Peloton's business had surged early in the pandemic as consumers turned to at-home exercise equipment while economy was in lock-down and gyms were shuttered. But demand slowed as businesses reopened and people felt comfortable returning to the gym.
Sales tumbled 11% during its most recent fiscal year ended June 30, while its losses ballooned to $2.8 billion. Last month, its current CEO, Barry McCarthy told employees that the job cuts and store closures were necessary "if Peloton is ever going to become cash flow positive."
But the company has also zig-zagged on its pricing, introducing a second set of price cuts in April due to slowing demand, only to reverse that in August by increasing prices on its Bike+ and Tread products.
"Much work remains to reposition [Peloton] for profitable growth," noted Truist analyst Youssef Squali in an August 25 research note. The company "remains a show me story."
Peloton shares have fallen more than 90% over the last year. The company's struggles have spurred calls by activist investors Peloton to shift gears, including exploring a possible sale of the company.