Dive Brief:
- Peloton announced the resignations of both Executive Chairman John Foley and Chief Legal Officer (CLO) Hisao Kushi Monday following months of operational and financial hiccups for the company. Foley’s resignation takes effect immediately, while Kushi’s is effective Oct. 3, the company said in a release.
- The resignations come roughly two weeks after the fitness equipment maker said it was delaying the filing of its 10-K for the year ended June 30, citing the need for more time to complete accounting and disclosures related to measurement of fourth quarter asset impairment charges associated with its recent decision to exit its last mile warehouses, according to an Aug. 29 Securities and Exchange Commission filing. The report will be filed within 15 days of the missed date.
- Earlier last month the company also announced it was slashing its workforce, closing a number of stores and exiting last-mile logistics following the shuttering of its remaining warehouses as it makes the switch to third-party provider delivery.
Dive Insight:
Foley, who co-founded the New York-based company in 2012, previously acted as CEO for ten years before taking on the role of executive chairman for the company in Feb. 2022. Kushi, also a co-founder, served as CLO for seven years and played a key role in the company’s music license deals as well as in protecting crucial emerging intellectual property, according to the release.
“Now it is time for me to start a new professional chapter. I have passion for building companies and creating great teams, and I am excited to do that again in a new space. I am leaving the company in good hands,” said Foley in the company statement.
Karen Boone, the current audit committee chair, is set to replace Foley as chairperson of the board while Tammy Albarran, current chief deputy general counsel at Uber, will become CLO in October after Kushi’s resignation is finalized.
The co-founders are stepping down as the company moves to shut down its existing warehouses following wobbly financial results after the firm’s pandemic-fueled growth.The company submitted a notification of a missed filing due to accounting and disclosure issues related to the decision to exit last-mile warehouses and pivot to third party providers for delivery.
This pivot caused a good amount of job cuts within the company — roughly 780. The company also announced closures of multiple storefronts as it looks to reassert itself as a luxury brand.
In the fourth quarter the company reported a 28% drop in revenue year over year to $678.7 million while net loss also widened 297% to $1.2 billion. Although the company lowered prices in April, last month the company said that it would increase prices of more premium products like Bike+ and Tread, so as to adopt a more “strategic pricing strategy,” according to an Aug. 12 release.
