today is Sep 27, 2022

Business | The Week in Business: Peloton’s Tough Times

with interest

Feb. 13, 2022


Credit... Giacomo Bagnara

What’s Up? (Feb. 6-12)

Peloton Hits a Steep Hill

Early in the pandemic, with gyms closed and people stuck at home, demand for Peloton’s bikes and virtual classes soared. So did its share price. But sales growth has slowed as gyms and fitness studios reopened. The company’s outlook has not been helped by a recall of its treadmills over safety concerns and fictional characters suffering heart attacks while riding its bikes in not just one, but two popular television shows. Peloton has been forced to hit the brakes, halting production of its bikes and treadmills, scratching plans for a new factory in Ohio and on Tuesday announcing that it would lay off 2,800 workers, about 20 percent of its work force. The company’s founder, John Foley, said he would step down as chief executive and become executive chairman. Barry McCarthy, a former chief financial officer of Spotify, was named chief executive and president.

Inflation Sticks

Speaking of hills, prices continued their steep upward trajectory in January, according to new numbers released by the Department of Labor on Thursday. The Consumer Price Index, a key measure of inflation, showed that prices have climbed 7.5 percent over the past year. While increases in car prices, which were mostly because of pandemic supply chain issues, moderated somewhat, the cost of food, rent, electricity and other services continued to rise, suggesting that there are more than just pandemic factors at play. That could put more pressure on the Federal Reserve to cool the economy. Investors now expect the Fed to raise interest rates by half a point in March, rather than its standard quarter-point increase.