It looks like it isn’t only restaurants that are suffering thanks to the lockdowns imposed during the wake of the coronavirus pandemic. America’s largest privately held fitness chain is now facing financial ruin as hundreds of its clubs have been shut down.
There might still be hope for it though. Read until the end to find out how 24 Hour Fitness can survive the ongoing health crisis.
As of the moment, the company is reportedly in talks with the law firm Weil, Gotshal & Manges as well as Lazard, a financial advisory firm, to discuss the next step it can take. One of the choices on the table isn’t looking good though as it weighs on bankruptcy.
This can happen within the next months as the fitness chain deals with issues that have been plaguing it even before the coronavirus arrived on American soil. Apparently, 24 Hour Fitness’ leaders have a heavy debt load and intense competition keeping them up at night.
Now, the coronavirus lockdown has worsened their standing as over 400 of 24 Hour Fitness’ clubs have been ordered to close their doors to prevent the spread of the contagious COVID-19. The company has also said that the closure might last for ‘an extended period of time’ as the world scrambles to deal with the pandemic.
On the bright side, some sources also said that the company may still be able to avoid bankruptcy. Official spokespersons from the parties involved have yet to respond to these though.
For now, 24 Hour Fitness has suspended billings for its members should they remain unable to open their clubs again soon.
While certain 24 Hour Fitness clubs have recorded excellent numbers in 2019, the company may not be seeing such good figures once the lockdown has been lifted. Similar to the rest of the fitness industry, the gym chain would have to deal with people’s suppressed appetite for paying for gym memberships as they face unemployment.
What more, the panic and concerns that the coronavirus brought with it might discourage fitness enthusiasts from returning to crowded fitness studios. COVID-19 is known for its fast transmission with the virus surviving on various surfaces.
The rest of the fitness industry has also notably banded to lobby for certain benefits such as rent relief and business interruption insurance.