24 Hour Fitness Files for Bankruptcy

24 Hour Health and fitness has filed for Chapter eleven individual bankruptcy security in Delaware citing fallout from the COVID-19 pandemic that compelled it to near its gyms throughout the United States in the center of March.

The company permanently closed one hundred gyms in the U.S. and has about three hundred remaining. It expects a greater part of its areas to be reopened by the close of June.

In its submitting, the company claimed it has secured $250 million in debtor-in-possession financing to go on operations as it reopens. In accordance to a report from Bloomberg, the company drew down its $a hundred and twenty million credit score line because the onset of the pandemic. It experienced credit card debt of $one.three billion because a leveraged buyout in 2014.

“If it were not for COVID-19 and its devastating results, we would not be submitting for Chapter eleven. With that claimed, we intend to use the process to improve the long term of 24 Hour Health and fitness for our workforce and club associates, as well as our stakeholders,” chief govt officer Tony Ueber claimed in a statement. “We assume to have considerable financing with a path to restructuring our equilibrium sheet and operations to make sure a resilient long term.”

The individual bankruptcy comes as center-tier gyms struggle to maintain on to customers who are switching to reduced-value gyms or alternatives like Peloton, which observed its revenue soar sixty six% in the 3rd quarter.

Gold’s Gymnasium filed for individual bankruptcy in Might. Town Sporting activities Global, which owns New York Sporting activities Club and other town clubs, claimed it is actively thinking of strategic alternatives as it faces a significant credit card debt load and does not have the dollars on hand to make payments in the near term.

The CEO of 24 Hour Health and fitness, which is privately held, claimed the restructuring would end result in “reinvestment in our existing clubs, opening new clubs, and introducing several new innovative items and products and services.”

Justin Sullivan/Getty Visuals

24 Hour Fitnesschapter eleven, COVID-19