There’s nothing quite like throwing money at a dead brand, hoping that one day consumers will actually start buying your products.
This is no more true than with the expensive American exercise bike company Peloton, which after investing hundreds of thousands in its own start-up retail network in Australia, which included an expensive brand name department store at Martin Place Sydney, David Jones as well as at Bondi are still struggling to bring consumers into Australia.
“We get a lot of tire kickers,” a staff member in Australia said recently.
Take Martin Place Sydney where the biggest crowd yesterday was a protest against what is happening in Tibet.
Executives who used to stroll through Martin Place, a once-perfect audience for the overpriced peloton fighting globally to survive, have disappeared due to COVID lockdowns and the shift to work.
I sat drinking a coffee outside their expensive Martin Place store yesterday and within 30 minutes only one person walked into the store which would have cost tens of thousands of dollars to fit out.
Local Peloton CEO Karen Lawson describes herself as a transformational leader in the tech industry. So it will be interesting to see how she transforms a struggling brand into a success in Australia.
The Martin Place store is as much Peloton-branded clothing as it is exercise bikes with large 23-inch LED screens.
Lawson says his core skill set is to “drive reinvention and transformation to help the world’s biggest brands stay ahead of disruption.”
Peloton’s stock value has plummeted 80%, their global CEO has stepped down and management disruptions seem to be a daily occurrence.
As the market deserts the brand and the machines to sell, the company has been forced to look for new ways to enter the market.
Overnight, the company was forced to explore new pricing models in certain markets as the exercise bike company seeks to attract more customers and return to profitability.
At this point, it’s unclear if the company will introduce its new pricing strategy in Australia.
The company said it created a limited pilot program to explore pricing and options for new members, but did not reveal details about the plan.
According to the Wall Street Journal, which first reported the move, select Peloton stores will offer a bike and workout class subscription for between $81 and $136 per month for a limited time beginning in June. ‘today.
Peloton shares fell another 2% on the news.
The pricing experiment aims to find a price proposition that helps the company return to profitability without hindering growth, the report says.
If a consumer cancels, Peloton will take the bike back free of charge.
Last month, the company reported a bigger-than-expected quarterly loss and cut its full-year revenue forecast, saying the lower outlook was to adjust to changes in demand brought on by the reopening of economies.
Barry McCarthy, who took over as the company’s chief executive last month, said he plans to reshape his management team, consider making simpler bikes and change the company’s capital expenditure strategy. the society.
An insider said the loss-making Australian operation could be closed.
What is not known if this happens is the cost of exiting expensive leases such as Martin Place Sydney, which is among the most expensive retail outlets in Australia.
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