Peloton Interactive is going bigger with going smaller when it comes to its stores.
The New York-based company, a provider of high-end stationary exercise bicycles and treadmills, plans to have 10 of its tiny new micro-stores "open in time for the holiday season," according to CEO Peter Stern. Peloton launched its first 300-square-foot micro-store at The Mall at Green Hills at 2126 Abbott Martin Road in Nashville, Tennessee, last year, where it tested the concept. It opened a second one last month in Utah, and eight more are coming, Stern said.
By contrast, Peloton has downsized its fleet of large retail showrooms.
"We exited 24 retail showroom locations in fiscal 2025, reducing our retail footprint from 37 to 13 showrooms at the end of Q4, excluding the addition of one micro-store location," Peloton Chief Financial Officer Liz Coddington said Thursday on a fiscal fourth-quarter earnings call.
The company also announced another round of cost-cutting measures, including laying off 6% of its workforce and "reshaping ... the locations where we work," according to Stern, actions expected to save $100 million annually.
Like other businesses, Peloton is trying to optimize its brick-and-mortar footprint to maintain an appropriate physical presence in the most cost-effective manner. A number of chains — including Macy's, Bloomingdale's, Whole Foods Market and Kohl's — have debuted small-format stores to cut the cost of expanding into new areas. In May, Peloton deemed its Nashville micro-store pilot test a success and said it would open more.
Peloton has had several CEOs and several waves of layoffs as it has tried to mount a turnaround. It saw its fortunes rise during the pandemic, when Americans rode its bikes and paid for its online classes when they couldn't leave their homes to exercise. But sales tumbled after gyms reopened, and Peloton began slashing costs to make a comeback. That included reevaluating its retail strategy.
Three years ago, then-CEO Barry McCarthy called for shuttering "a significant" number of Peloton's showrooms. At one time, Peloton had roughly 70 of them, mostly in malls. So far, the company has replaced two of its mall sites with micro-stores. Those pint-sized locations are more akin to kiosks than full-fledged stores. The newest one is at the Fashion Place mall at 6191 State St., in Murray, Utah.
A third one is coming to Las Vegas, according to Pelobuddy.com, a news website not affiliated with the company. Peloton declined to comment on that report or to offer any detail on Stern's reference to "relocating some of our work."
Peloton leases 309,000 square feet at Hudson Commons at 441 Ninth Ave. in Manhattan for its headquarters, according to CoStar data.
The company's results for the fourth quarter were solid, as it turned a profit. It posted net income of $21.6 million compared to a $30.5 million loss in the prior-year period. It garnered $606.9 million in total revenue compared with $643.6 million a year ago.