By Senad Karaahmetovic
Peloton (NASDAQ:PTON) will completely outsource its production in a bid to cut costs and simplify its supply chain, the company announced today.
The fitness company will further expand its current relationship with Taiwanese manufacturer Rexon Industrial (TW:1515) and simultaneously suspend operations at its Tonic Fitness facility through the remainder of 2022.
Peloton CEO Barry McCarthy said, "Today we take another significant step in simplifying our supply chain and variablizing our cost structure – a key priority for us. We believe that this along with other initiatives will enable us to continue reducing the cash burden on the business and increase our flexibility. Partnering with market-leading third-party suppliers, Peloton will be able to focus on what we do best – using technology and content to help our 7 million Members become the best versions of themselves."
Rexon will be in charge of manufacturing Peloton’s Bike and Tread products.
“We plan to maintain a significant corporate and manufacturing presence in Taiwan with over 100 Peloton Taiwan team members who continue to play a key role in our engineering and manufacturing strategy,” Peloton Chief Supply Chain Officer Andy Rendich added.