Shares of Peloton plunged on news that company co-founders John Foley and Hisao Kushi are stepping down amid sluggish sales.
Foley stepped down as executive chair on Monday. Kushi will depart from his role as chief legal officer on Oct. 3.
Foley had been Peloton’s CEO for 10 years and became executive chair in February. The board of the company that makes high-end stationary bikes and treadmills named Karen Boone as chairperson. Boone was elected to Peloton’s board as audit committee chair in 2019 and became lead independent director in October 2021.
“It is time for me to start a new professional chapter,” Foley said in a prepared statement. “I have passion for building companies and creating great teams, and I am excited to do that again in a new space.”
Kushi has been chief legal officer since 2015. He will be succeeded by Tammy Albarran, who was the chief deputy general counsel and deputy corporate secretary at Uber Technologies Inc.
Company trying to reshape business
The shares sold off, losing about 12 per cent to trade below $10 apiece on the Nasdaq. At one point last year, those same shares were changing hands at $162.
Peloton Interactive Inc. is trying to reshape its business, which boomed during pandemic lockdowns but has dropped off dramatically as restrictions are eased. The company recorded its only profitable quarters during the pandemic.
Last month, the New York City company announced that it was cutting jobs, shifting its delivery work to third-party vendors and significantly reducing the number of stores it has in North America.
It also broke from its original business model of direct sales last month, saying that it will now sell its exercise bikes and other gear on Amazon in the U.S.
In July, Peloton said that it would stop making its own interactive stationary bikes and treadmills, outsourcing those duties to a Taiwanese manufacturer.
Peloton has had success with its digital app, which can be used with other equipment. The company has said that it would like to focus more on the app and less on equipment sales.