| The traditional fitness industry is among the industries hit hardest by the COVID-19 pandemic. Gym and health club bankruptcies have skyrocketed since lockdowns began in March: Fitness powerhouses like Gold’s Gym, 24 Hour Fitness and Town Sports filed for bankruptcy protection this summer, in addition to many smaller entities that have filed for bankruptcy or closed.
Gyms have struggled to overcome numerous hurdles. State governments closed many locations for extended periods of time, leading many gyms to suspend monthly payments, or suffer elevated levels of cancellations and chargebacks. Once open, gyms needed to change their operations in ways that made them less profitable, such as by limiting participation in classes, reducing the number of customers permitted in the facility, and closing amenities like saunas, steam rooms and locker rooms. Gyms have also purchased additional supplies and safety equipment ranging from disinfectant sprays to touchless water fountains and electrostatic sprayers.
This lost revenue and reduced profitability has led to difficulty paying rent, payroll and other debts. Gold’s Gym owed $7 million in back rent at the time it filed bankruptcy and it sought to reject 32 leases. Gold’s Gym and 24 Hour Fitness reported that they closed all of their locations for months and furloughed 4,597 and 17,800 employees, respectively.
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