Peloton Interactive announced that it has accepted the resignations of John Foley as executive chair and Hisao Kushi as chief legal officer, effective Sep. 12, 2022, and Oct. 3, 2022, respectively.
Foley co-founded Peloton in 2012 and has built the company into a global interactive fitness platform. After previously serving as the company’s CEO for ten years, he became executive chair in February 2022. He is considered the creative driving force behind the connected fitness industry. The board has appointed Karen Boone as Peloton’s new chairperson of the board. Boone was initially elected to Peloton’s board of directors in 2019 as chair of the audit committee and was named lead independent director in October 2021. She previously served as president, chief financial and administrative officer of Restoration Hardware (RH). During her tenure at RH, Boone led the company through tremendous growth, the transition to its current membership model, and several key financial milestones and transactions.
Kushi also co-founded the company and played a key role in its growth and global expansion. He has served as the company’s chief legal officer since 2015. During his tenure, Kushi led the execution of the company’s M&A activities, crafted music licensing agreements and protected emerging intellectual property. Tammy Albarrán will replace Kushi as Peloton’s chief legal officer and corporate secretary on Oct. 3. In her new role, Albarrán will oversee legal, compliance and policy. Albarrán is a veteran legal executive in the tech industry and brings a wealth of experience, having most recently served as chief deputy general counsel and deputy corporate secretary at Uber Technologies, Inc. During her time at Uber, Albarrán oversaw its global legal teams and was a driving force behind the company’s cultural transformation. Albarrán was also a key champion of the company’s diversity, equity and inclusion efforts. Before Uber, she was a partner at Covington & Burling LLP in the securities litigation and investigations practice, where she worked alongside former Attorney General Eric Holder. Albarrán and Holder authored the high-profile report that led to profound changes at Uber.
Peloton co-founder and former executive chair Foley commented: “As I reflect on the journey Peloton has been on since we founded it, I am so proud of what we have built together. From day one, the incredible talent we’ve had on our team, and the dedication, hard work, and creativity of every Peloton employee are what got us to where we are today. We founded the company because we wanted to make fitness and wellness convenient, fun, and effective. Because of the work of thousands of people, we’ve done that. Now it is time for me to start a new professional chapter. I have a passion for building companies and creating great teams, and I am excited to do that again in a new space. I am leaving the company in good hands: The leadership team, with the support of the board, is going to take Peloton to the next level as a company.”
Peloton, the former rising star in the connected fitness scene, has had a few mixed months. After the Covid lockdowns, which benefited the home fitness business, the halted surge caused investors to call for restructuring the company, replacing management or even selling it. The company’s new CEO, Barry McCarthy, who took over from Foley in February this year, is expected to lead the company out of the crisis. In March, the management team was expanded to include a chief supply chain officer and a chief people officer, but the waters did not necessarily become calmer. A new CFO followed in June, and in July, it was announced that the company’s own production facilities would be ceased, and a Taiwanese producer would manufacture the home fitness equipment. The move was another step in Peloton’s new strategy under McCarthy to cut costs, simplify its supply chain and focus on technology and content.
Currently, the company offers new memberships for corporate customers, cuts jobs and partners with Amazon in sales. Peloton reported a $1.24 billion loss in Q4 but was not completely disillusioned: “Our Q1 outlook reflects near-term demand weakness associated with our recent hardware price increases as well as typical seasonal demand softness,” the company said. “We expect an improving gross margin, primarily due to the price increases for Bike+ and Tread that were implemented in mid-August.” The company’s delayed annual report should be published any time now. It can be expected that Foley’s departure from the company will significantly impact Peloton’s outlook for the new fiscal year. As a significant shareholder, however, Foley is likely to retain considerable influence.
