Peloton (PTON) - Get Free Report shares surged higher Wednesday after the connected fitness company would sell its signature exercise bike, as well as other apparel and accessories, through Amazon (AMZN) - Get Free Report.
The moves follows last week's decision to boost prices for its Bike+ and Treadmill by between 25% and 30% in various markets around the world amid some of the fastest consumer prices increases in more than four decades, as well as a series of supply-chain snarls that have complicated the group's in-house production.
The group is also planning to cut around 800 jobs, while closing several stores, as part of a "significant and aggressive reduction" in its retail footprint under the turnaround strategy of CEO Barry McCarthy.
"Expanding our distribution channels through Amazon is a natural extension of our business and an organic way to increase access to our brand," said Peloton CCO Kevin Cornils. "We want to meet consumers where they are, and they are shopping on Amazon"
"Providing additional opportunities to expose people to Peloton is a clear next step, as we continue to generate excitement for our unparalleled connected fitness experience," he added.
Peloton shares were marked 16.6% higher in early Wednesday trading to change hands at $13.06 each, a move that would still leave the stock nursing a six-month decline of around 54%.
Last month, Peloton said it would stop making its flagship exercise bike in-house and instead expand a manufacturing contract with a group in Taiwan.
Rexon Industrial Corp will be the primary manufacturer of Pelton's fitness equipment, including its iconic stationary bike and its popular treadmill.
Peloton said the shift forms part of its strategy to both simplify its supply chain and focus on technology and content under the turnaround plans of new CEO McCarthy.
Peloton posted a wider-than-expected third quarter loss of $2.27 per share in late May, with McCarthy cautioning that the overall business was 'thinly capitalized', with only $879 million in unrestricted cash at the end of the quarter, and unveiled details of a $750 million term borrowing agreement with Goldman Sachs and JPMorgan.