Peloton to outsource bike, treadmill production

NEW YORK — Peloton Interactive Inc. said Tuesday it will halt in-house bike and treadmill manufacturing as part of its turnaround.

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In announcing the expansion of the company’s relationship with Taiwanese manufacturer Rexon Industrial, Peloton Chief Executive Officer Barry McCarthy said the move will simplify the company’s supply chain and overhaul its cost structure, CNBC reported.

“We believe that this along with other initiatives will enable us to continue reducing the cash burden on the business and increase our flexibility,” McCarthy said in a prepared statement.

Bloomberg News called the step an “about-face” from in-house production split between its own facilities and partners during the past three years.

Specifically, the company manufactured some of its standard Bike models and the higher-end Bike+ at facilities gained in its 2019 acquisition of Tonic Fitness Technology, while Rexon also built bikes as well as Peloton’s popular Tread treadmills, the business news outlet reported.

“We are going back to nothing but partnered manufacturing,” Peloton Chief Supply Chain Officer Andrew Rendich told Bloomberg, adding, “It allows us to ramp up and ramp down based on capacity and demand.”