Peloton Interactive Inc said it would start selling its exercise bike and other fitness accessories on e-commerce giant Amazon.com Inc in the United States in a bid to combat a slowdown in sales from pandemic highs.
The news sent the battered shares of the fitness equipment maker up 18.4% in afternoon trading on Wednesday, putting them on course for their best day since February.
The stock has lost more than half of its value this year as Peloton’s exercise bikes and treadmills fell out of favor after lockdowns ended and people returned to gyms.
Peloton’s exit from selling exclusively through its own e-commerce site and global showrooms marks Chief Executive Barry McCarthy‘s latest bet to attract more customers, cut losses and improve cash flow.
The company said its “Bike”, priced at $1,445 and a big contributor to its revenue, would be available in most parts of the United States, while the pricier Bike+ will not be sold on Amazon.
The shift in the sales strategy comes months after Reuters reported Peloton had drawn buyout interest from Amazon, which has been looking for lucrative deals this year.
McCarthy hired former Amazon executive Liz Coddington as chief financial officer in June after warning of a cash crunch in the previous month.
To cut costs, the company cut hundreds of jobs, shuttered stores and outsourced delivery to third parties this year.
Peloton has also been struggling to boost membership, adding just about 200,000 customers who paid a monthly fee to access classes in the reported quarter, nearly half compared to the same period a year ago.
“Amazon’s Prime subscriber base is an extremely attractive potential customer base for Peloton. Plus, Prime benefits including fast shipping and subsidized promotional spend would help Peloton in improving its customer experience and unit economics,” MKM Partners analyst Rohit Kulkarni said.
Peloton will also sell accessories such as mats and dumbbells on the e-commerce platform from Wednesday.