Earlier this year as part of a restructuring and streamlining effort, Peloton’s CEO Barry McCarthy announced that Peloton was planning to close some of the US & Canadian retail showrooms in 2023. At the time, he said:
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. […] 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.
We are now hearing that Peloton plans to close 16 showrooms at the beginning of 2023 – mostly in the US with a handful in Canada as well. This would equate to around 15-20% of the US showrooms, as there are around 90 showrooms currently open in the US.
Showrooms that will be impacted by the upcoming closures were notified this week about the plans. The impacted stores are expected to all be closed by the end of January. This would keep the showrooms open through the typically busy upcoming holiday season.
With employees finding out this week about the closures, that would translate to around 60 days of notice of their locations closing. We’re hearing that severance packages have been offered to those employees impacted.
This is not expected to be the only showrooms closing in 2023. More will likely be closed in the following months – with the performance of each remaining showroom location being continually evaluated to see if it’s worth it remaining open to the company’s bottom line.
Closing some showrooms is just one of several changes & new initiatives Peloton has put into place this year to attempt to return to profitability. They have also outsourced all delivery to third parties in the US, and are looking at new retail channels, including selling on Amazon in the US, as well as having displays at DICK’S Sporting Goods stores.
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