By Nathalie Voit

 

Interactive fitness platform brand Peloton will no longer be manufacturing its own exercise equipment, the company said in a press release issued on July 12.

 

Peloton said the move is a “natural progression” in its strategy to simplify its supply chain and reduce costs.

 

Leading Taiwanese manufacturer Rexon Industrial Corp. will take over the production and engineering process. The firm will become the primary manufacturer of Peloton’s iconic bikes and treadmills.

 

Due to the changes, Peloton will quit all owned-manufacturing operations. 

 

“We believe that this along with other initiatives will enable us to continue reducing the cash burden on the business and increase our flexibility,” Peloton CEO Barry McCarthy said in the announcement.

 

Factories operated by Tonic Fitness Technology–where production of hardware for Peloton products takes place–will cease activity through the remainder of 2022. Peloton bought Tonic in 2019.

 

McCarthy said the shift will enable Peloton to focus on where it performs best–”using technology and content to help our 7 million Members become the best versions of themselves.”

 

Peloton has been struggling to gain traction since the early days of the COVID-19 pandemic when the company saw a huge jump in its client base thanks to mandatory lockdown orders and Peloton-friendly work-from-home policies. As fitness centers nationwide were shut down, the number of people who purchased the company’s $1,500 bike soared.

 

As gyms reopened and the worst effects of the public health crisis ended, however, the once thriving company saw its sales decline dramatically. Since then, Peloton has switched CEOs in a bid to update its failing strategy.

 

Tuesday’s announcement is the latest in the company’s effort to turn itself around.