In a development that perhaps you or some of your gym rat buddies may have foreseen/worried about, 24 Hour Fitness has filed for bankruptcy. In a statement in which they revealed that news to the public they attributed their decision to the "dramatic impact the COVID-19 pandemic[has had] on the economy and the fitness industry."
24 Hour Fitness will close more than 130 of their U.S. locations across 14 states, which will leave about 300 locations still in operation. Business Insider adds that most of the gyms shutting down will be in Texas and California (for a complete list, click here).
In a Chapter 11 filing, the company said that they've secured funding of $250 million to aid in their reopening of some of those still-existing clubs, according to CNN. They expect a majority of those to be open by the end of this month.
"If it were not for COVID-19 and its devastating effects, we would not be filing for Chapter 11," said CEO Tony Ueber via a statement. "We expect to have substantial financing with a path to restructuring our balance sheet and operations to ensure a resilient future."
In an effort to spin this into at least some sort of positive, the statement said the new business model will see "reinvestment in our existing clubs," the "opening of new clubs," and will introduce what they claim will be "several new innovative products and services."
Last month, Gold's Gym put together their own bankruptcy filing. They too claimed that COVID-19 affected them "deeply and in many ways." Most of their 700 worldwide gyms faced temporary closures. And, in April, they permanetly closed down 30 spots. Note that they expect to come out of bankruptcy in August.
CNN adds that several other health clubs are feeling the pinch. On Monday, the owner of New York Sports Club and several other East Coast gyms issued a warning that bankruptcy was being considered due to financial issues stemming from temporary closures.
In a regulatory filing, Town Sports International said that the "scope and duration of the interruption to our operations has substantially reduced our cash flow." To try and stay afloat, many of their workers have been laid off and they've also discontinued rent payments.
