24 hour fitness files for bankruptcy

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24 hour fitness deposit for Chapter 11 bankruptcy protection in Delaware, citing the fallout from the COVID-19 pandemic that forced it to close its gyms across the United States in mid-March.

The company has permanently closed 100 gyms in the United States and has about 300 remaining. It expects the majority of its locations to reopen by the end of June.

In its filing, the company said it secured $ 250 million in debtor-in-possession financing to continue operations when it reopens. According to a Bloomberg report, the company has used its $ 120 million line of credit since the start of the pandemic. He had $ 1.3 billion in debt since a debt buyout in 2014.

“Without COVID-19 and its devastating effects, we would not file for Chapter 11. That said, we intend to use the process to strengthen the future of 24 Hour Fitness for our team and members of the team. club, as well as our stakeholders ”, CEO Tony Ueber noted in a report. “We plan to have substantial funding with a path forward to restructure our balance sheet and operations to ensure a resilient future.”

Bankruptcy comes as mid-level gyms struggle to retain customers who turn to lower-cost gyms or alternatives like Peloton, which has seen its revenue. jump 66% in the third trimester.

Gold’s Gym filed for bankruptcy in May. Town Sports International, which owns the New York Sports Club and other clubs in the city, said it is actively considering strategic alternatives as it faces heavy debt and does not have the cash to make payments. short term.

The CEO of 24 Hour Fitness, a privately held company, said the restructuring would result in “reinvestment in our existing clubs, the opening of new clubs and the introduction of several new innovative products and services.”

Justin Sullivan / Getty Images

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