John Foley, founder of Peloton, steps off the treadmill

During the Covid-19 pandemic, John Foley’s dream came true; his brainchild, Peloton, a company he co-founded to produce internet-connected exercise machines in 2012, became worth more than $50 billion on the stock market.

The company went public in 2019 and, when its fortunes soared during lockdown, shares rose to over $160. Then came a rude shock. People returned to the gym and outdoor activities. The company finished 2021 with record losses, appointed a new CEO and has now accepted the resignation of its co-founder Foley from his position as executive chairman.

“He is widely regarded as the pioneer – the driving and creative force behind today’s global connected fitness industry,” the company said in a statement released to announce his departure.

As I reflect on the journey Peloton has been on since we founded it, I am very proud of what we have built together

John Foley, co-founder of Peloton

Foley had already been somewhat sidelined from day-to-day operations with the appointment of Barry McCarthy as CEO. The company is now trying to become a subscription-based training business – McCarthy comes from Netflix and Spotify and is trying to emulate that model, moving away from ambitious industrial manufacturing plans.

But the transition is proving ruinous. In its last fiscal year, closing June 30, the company suffered a loss of $2.8 billion, compared to a loss of $189 million the year before, and the company’s shares have nosedived from their $160 peak to $11, having lost more than 90% of their value in the space of a year.

Inflation has also been a factor; more is being spent on petrol and food and there is less disposable income available. Besides, those who buy an exercise bike will have it for several years, especially given their price tag which starts at around $1,500. Many of these pandemic bikes are now on the second-hand market, competing with the very company that sold them in the first place.

In the statement announcing his departure, Foley said: “As I reflect on the journey Peloton has been on since we founded it, I am very proud of what we have built together. From day one, the incredible talent we have had on our team and the dedication, hard work and creativity of every Peloton employee is what has brought us to where we are today. We founded the company because we wanted to make fitness and wellness comfortable, fun and effective. Thanks to the work of thousands of people, we have succeeded. Now it’s time for me to start a new professional chapter. I have passion for building companies and creating great teams, and I’m excited to do that again in a new space.”

Also leaving the company is Hisao Kushi, the company’s chief legal officer since 2015. Peloton’s board has appointed Karen Boone to replace Foley as its chairman, while Tammy Albarrán will replace Kushi as chief legal officer. “Albarrán is one of the most recognized legal executives in the tech industry and brings a wealth of experience,” the company says, referring to her spell as Uber’s number two in legal matters.