by Key Takeaways
- Peter Stern, a co-founder of Apple Fitness+, has been appointed CEO of Peloton.
- He was previously employed at Time Warner Cable and most recently at Ford.
- Increasing Peloton’s reliance on services and reversing recent losses are his goals.
To address an ongoing crisis, Peloton has appointed Peter Stern, a cofounder of Apple Fitness+, as its CEO.
Most recently, the new leader served as President of Integrated Services at Ford, which included BlueCruise semi-autonomous driving. He maintained a leadership position at Time Warner Cable in addition to his employment at Apple.
In a statement, Jay Hoag, the chair of the Peloton board, stated that Stern was the most qualified candidate for the CEO position. He is said to have a “deep understanding” of the health sector, a track record of “sustainable growth through innovation,” and experience expanding tech-oriented platforms.
On January 1st, 2025, Stern will take over as president and CEO. Since Barry McCarthy resigned in May, board members Karen Boone and Chris Bruzzo have been co-CEOs and co-Presidents; nevertheless, Boone will be the sole interim leader from November 1st until Stern’s formal appearance.
The change reflects Peloton’s recognition that it now views itself more as a provider of fitness services than a producer of gear. Although it initially gained notoriety for products like the bike and tread, its subscription-based app has grown in popularity. Subscribers accounted for about $426 million of its Q3 revenue. Additionally, there is a strong initial demand for a strength training app.
Stern is under pressure to perform. As gym-goers purchased bikes and treadmills to work out at home during the early epidemic, Peloton had a boom. However, as people started going outside again, that rush subsided and was obviously not returning. The company has also had to contend with a number of issues, such as competition from companies like Apple Fitness+, lower-priced alternatives to its equipment like Echelon, and a child safety Tread recall.
Just two years after founder John Foley departed, McCarthy resigned in May, and 15% of the team was laid off as well. According to Peloton at the time, there was “just no other way” to keep expenses in line with declining income.
There have been conflicting indications of progress. Peloton’s Q3 revenue of $586 million was above some analyst projections, but the company’s loss was larger than projected (90 cents per share versus 15). While assuring investors that widespread layoffs and other reductions are unlikely in the immediate future, Stern will need to figure out how to reduce potential losses in the future.
