Gold's Gym International Inc. filed for Chapter 11 on Monday (May 4) as a way to "facilitate the financial restructuring of the company" after nationwide lockdowns resulted in its inability to service debt payments, read a company press release.
The gym operator filed for bankruptcy in Dallas, Texas, and noted in the filing that it has $100 million in assets and liabilities. The company will continue to operate during the restructuring process:
"We want to be 100 percent clear that Gold's Gym is not going out of business," President and CEO Adam Zeitsiff said in a press release. "The brand is strong, and we'll continue to innovate and grow our digital business, our licensing program and our global footprint as we focus on serving our millions of members across the world."
Here's a message from the President and CEO Adam Zeitsiff on today's bankruptcy filing...
The gym operator said its financial difficulties stem directly from coronavirus lockdowns and said it believes it will remerge from bankruptcy proceedings by the start of August.
"This has been a complete and total disruption of every one of our business norms, so we needed to take quick, decisive actions to enable us to get back on track," the company said.
The restructuring will only impact company-owned locations, which represent roughly 10% of the 700 locations around the world.
Last month, the company closed 30 locations across the US. This included gyms in Alabama, Colorado, Missouri, Texas, Oklahoma, North Carolina, and South Carolina. At the time, it blamed virus-related shutdowns for its rapid financial deterioration.
Not too long ago, 24 Hour Fitness said it was preparing to restructure. As Americans are confined to their homes in the lockdown, with an increasing number of them canceling gym memberships and opting for a Peloton bike. We noted a little more than a week ago that one Peloton spin class had a record number of riders for a live class, drawing in more than 23,000 riders.