It’s been argued that the Covid-19 pandemic didn’t fundamentally alter business practises but merely accelerated existing trends. You could point to the rapid take-up of digital technologies as a prime example of this phenomenon, or perhaps the expansion of telehealth services. But in some cases, businesses allocated capital in response to changes in consumer patterns that proved transitory. Peloton Interactive Inc (US: PTON) provides a case in point. A single share in the company would have set you back $163 (£128) in December 2020, but you could pick up that same share now for just over $3.
The provider of at-home fitness platforms has endured a torrid time since Covid-19 started to loosen its grip, culminating in the recent launch of a global refinancing programme, no doubt at highly favourable terms to any creditors willing to get on board. In its original filing to the US Securities and Exchange Commission in August 2019, Peloton cited a potential inability to anticipate consumer preferences as one of the risk factors for the business. Yet at the height of the pandemic, it might have seemed as if the group had underestimated the size of its addressable market. Subscriptions continued to grow, but once restrictions were lifted it became apparent that assumptions over the long-term impact of lockdowns proved wide of the mark. Peloton’s price points also became more of an issue for potential customers, some of whom would rather take their regular bikes for a spin around the park than fork out $2,000 for the privilege of frantically peddling away in their living quarters.
Unlike the world of “connected fitness”, the UK commercial property market was an early casualty of the pandemic, rather than a short-term beneficiary. Lockdowns accelerated the demise of the UK high street, and “stay at home” provisions eventually gave rise to the widespread take-up of flexible working arrangements. Some employers have subsequently become disenchanted with the practice, but it’s an entrenched feature of the labour market nowadays. Flexible workspace providers were initially viewed as an important stop-gap in helping businesses transition, but progress in this corner of the UK property market has been mixed at best.