Peloton Interactive Executive Chairman and Co-Founder John Foley of Inc. will step down from the fitness company as part of a leadership change, prolonging turbulent times at a business trying to come out of a severe slump.
Foley, who helped found Peloton in 2012 and served as chief executive officer for 10 years, will step down on Monday, the company said in a statement. Foley assumed the role of executive chairman in February when he handed the reins to CEO Barry McCarthy, a veteran of the company. Spotify SA technology and Netflix Inc.
Chief legal officer Hisao Kushi, another co-founder, is also aiming to withdraw. He will be replaced in that role by Tammy Albaran, who was recruited by Peloton from Uber Technologies Inc. Meanwhile, the role of president will be taken over by Karen Boone, a former Recovery Hardware executive who is currently the lead independent director.
Peloton investors initially welcomed the changes, sending the stock up 5.3% to $11.64 in extended trading Monday. However, the upside momentum soon evaporated, with the stock falling more than 2%.
A tumultuous year-long reshuffle at New York-based Peloton, which thrived in the early days of the pandemic but is now suffering from a slump in sales and growing losses. The company’s stock has fallen about 90% in the past year, and the company has struggled to deal with an inventory glut.
As part of the turnaround, McCarthy has cut thousands of jobs and shifted operations to third-party vendors. But Peloton’s report of precious goods in August signaled that his comeback attempt has a long way to go.
McCarthy’s goal is to make Peloton’s cash flow positive in the second half of next fiscal year. “We continue to make steady progress, but we still have a lot of work to do,” he said last month, acknowledging that the company’s financial performance may cast doubt on some. on “business viability”.
With Peloton’s longtime CEO now out of the picture, McCarthy may have a freer hand to make changes. The executive said the company should prioritize its digital offering over hardware and is exploring allowing subscribers to stream content from their smartphones to non-Peloton fitness equipment.
In addition, Chief Commercial Officer Kevin Cornils will also be leaving Peloton and will not be replaced. Some of Cornils’ responsibilities will be taken over by Dion Sanders as he assumes the role of chief emerging business, according to an internal McCarthy memo reviewed by Bloomberg. Chief Content Officer Jen Cotter will assume control of apparel and accessories, showing that the company remains committed to that market.
Albarran will take over Peloton’s legal operations on October 3. She helped oversee the company’s reshaping process at Uber, which began reshaping its image in 2017 after filing The difficult way leads to scandals and strained relationships with drivers.
Peloton looks set to draw on Albarran and Boone’s experience to “help move the company into our next chapter of growth,” McCarthy said.
Foley said he plans to build a business “in a new space” after leaving the company. The CEO helped turn Peloton into an iconic fitness brand with a loyal fan base, but was criticized for failing to forecast a sharp decline in demand for its exercise bikes. me.
Some Peloton investors had also hoped that Foley – and later McCarthy – would consider selling the company. But no suitor showed up, and McCarthy has said he doesn’t take the CEO job to oversee a sale.
Register Fortune feature email list so you don’t miss our biggest features, exclusive interviews and surveys.