Precor to Close NC Plant, Laying Off 123 Employees
The plant closure is part of Peloton’s corporate restructuring
Precor Manufacturing, a fitness equipment manufacturer, will shutter its Whitsett, Guilford County, NC plant by the close of October, resulting in the layoff of 123 employees.
The plant closure is part of a corporate restructuring by Peloton.
According to a WARN Act notice, Precor layoffs have already started at its 5704 Millstream Road plant in NC and are expected to continue through Oct. 31. The majority of the impacted Precor employees are assembly technicians and general production workers.
Last month, Precor, a division of connected fitness giant Peloton, officially named Dustin Grosz as Chief Executive Officer.
At the time of his appointment, Dion Camp Sanders, Chief Emerging Business Officer of Peloton, said Grosz’s immediate focus was to return the fitness equipment maker to a position where it generates positive cash flow.
As the new Precor CEO, Grosz wrote that Precor had been held to a “very high standard” but indicated that Precor hasn’t been living up to it.
“That’s about to change. In 2023 we are back to being Precor, a stand-alone subsidiary of Peloton, committed to the satisfaction of our customers and the impression our equipment makes on your exercisers,” he wrote last month.
Precor hadn’t appeared to have been at the forefront of Peloton’s concerns for quite a time. Last summer, when asked about the status of Precor, Peloton CFO Liz Coddington stated that Peloton was continuing to assess Precor’s strategy and that it wasn’t a focus.
“With all the other things that we’re working on, all of our supply chain work, the FAAS work that we’ve been doing, Precor hasn’t — the focus on Precor hasn’t been our highest priority area. And we don’t have much else to share at this point,” Coddington said on an August 2022 earnings call.
Peloton had remained mum on Precor until a recent earnings call when Peloton CEO Barry McCarthy made light of the fact that the connected fitness company has been contemplating selling the fitness equipment maker.
“You know, the worst kept secret on the planet is that we’ve been exploring the sale of Precor,” McCarthy joked to investors. McCarthy confirmed that Peloton was once on the verge of selling Precor, but the deal unraveled after the buyer dramatically reduced the price they were willing to pay.
“I mean, at some point, it crossed as a stupid line to the point where you’re just not willing to dance anymore. And that happened for us,” McCarthy said of the deal that went south.
He was forthcoming that for all the time Peloton owned Precor, the connected fitness brand had done little to invest in the performance of the business but assured that Peloton planned to “reverse course.”
“I think we understand how to add some incremental value without great expense and have a disproportionate increase in the value of the business. And the overarching strategy would be run Precor for the benefit of Precor and to not dilute those efforts for the benefit of our own operating business. Run it as a freestanding subsidiary. And so, that’s the path we’re on,” McCarthy told analysts.
