Another big announcement from Peloton to add to the list today. Along with price increases on the Tread and Bike+, layoffs of hundreds of member support employees, and the closing warehouses and shifting to third party deliveries, Peloton has also announced to their staff that they will be closing many of their retail storefronts across North America in the coming months.
Peloton CEO Barry McCarthy explained this decision in his memo to employees that went out today, saying:
“Lastly, we need to rebalance our e-Commerce and retail mix to drive efficiencies, which means we will reduce our retail presence across North America. This decision will result in a significant and aggressive reduction of Peloton’s retail footprint. Data tells us that in a post-COVID economy, consumers want a mix of virtual and in-person engagement with the brands they love, meaning a hybrid model of e-commerce as well as limited physical retail touchpoints. We have to meet our prospective Members where they are.
We will provide future updates on which retail operations will be impacted by this decision in the coming months. We do not anticipate closing retail locations in calendar 2022, but the timing is uncertain as we begin negotiations to exit our store leases.”
There is no information available yet as to what store locations will be closing, nor how many retail stores will be left once the closures are complete. These decisions and closures will take place over the course of the next few months, with some closures possibly starting sooner, if necessary.
Currently, Peloton has 97 showrooms throughout the US and Canada, so these closures mean another huge round of layoffs for the retail employees is coming. Peloton Showroom employees work on commission (and saw their effective pay & commission drastically reduced last year), and can even assist you over the phone, so if you do plan on making a purchase soon, you can help your local employees out in a huge way by ordering through the local showroom (either in person or via phone – and if you don’t have one near you we’re sure any random showroom would be happy to take your call).
The closure of so many Peloton Showrooms will drastically impact the accessibility of prospective customers to try out a Bike, Bike+, or Tread before purchase. It will be interesting to watch what impact this may have on the future of Peloton equipment sales. Will potential members be less likely to buy the Peloton Rower (which is currently in beta testing) if they can’t try it out in a showroom first?
Share your experiences at Peloton Showrooms below. Do you think these closures will help or hurt Peloton’s business?
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