Peloton ends in-house last-mile delivery operations

Mark A. Carlson

Exercise equipment provider Peloton will outsource all of its final-mile warehousing and delivery functions to third-party logistics (3PL) partners in a bid to save on costs.

The move will happen over the coming weeks, with the closure of physical retail stores also announced for 2023, as the company works to become profitable.

“The shift of our final mile delivery to 3PLs will reduce our per-product delivery costs by up to 50% and will enable us to meet our delivery commitments in the most cost-efficient way possible,” Barry McCarthy, CEO, wrote in a memo to staff on Friday [12 August 2022].

“These expanded partnerships mean we can ensure we have the ability to scale up and down as volume fluctuates,” he wrote.

Furthermore, the struggling fitness firm will close all 16 warehouses that have supported in-house deliveries, with job cuts expected. Up to 780 jobs are likely to go as part of the retail store closures.

Peloton’s business boomed during the pandemic, sending shares surging to as high as $120.62 apiece. However, demand began to slow as people started going out again. Peloton’s stock has fallen by 60% this year, hitting an all-time low of $8.22 in mid-July.

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