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This story originally appeared on ValueWalk
The coronavirus pandemic wrecked havoc on almost all retail segments, including fitness companies. Social distancing norms meant that gyms and health clubs were forced to shut their doors to their customers. Moreover, at the time of reopening, they were among the last to reopen, and that too with restrictions. Owing to such difficult business conditions, many businesses gave up and filed for bankruptcy protection. Let’s take a look at the biggest fitness bankruptcies of 2020.
Biggest fitness bankruptcies of 2020
We have referred to several online sources to come up with the biggest fitness bankruptcies of 2020. We have considered one 2021 bankruptcy as well. The ranking is based on the timing of bankruptcy filing. Following are the biggest fitness bankruptcies of 2020:
Bodytek (April 2021)
This Florida based company filed for Chapter 11 bankruptcy on April 19. As per the filing, the company had assets up to $53,245, while its debts were up to $552,794. With an outstanding claim of $298,276, First Home Bank was listed as Bodytek’s largest creditor.
In-Shape Health Clubs (December)
This California based company filed for Chapter 11 bankruptcy on Dec. 16. At the time, the company’s CEO Francesca Schuler, in a message shared on the company’s website, blamed the COVID-19 pandemic for the bankruptcy. In February, the company won the court’s approval to sell its assets to a vehicle managed by its lenders and its former CEO.
YouFit Health Clubs (November)
This Florida based company filed for Chapter 11 bankruptcy on Nov. 9. The bankruptcy filing showed that the company had a $10 million Paycheck Protection Program loan from Bank of America, which is listed as its largest creditor. YouFit founder Rick Berks, who founded this high-volume, low-priced club chain in 2008, resigned in May last year due to philosophical differences with the company’s financial partner group.
Cyc Holdings LLC (October)
This company filed for bankruptcy on Oct. 14. Cyc Holdings owns an indoor cycling chain, Cyc Fitness. Both Zengo Fitness LLC and Cycle House, which are affiliated with Cyc Holdings, were part of the bankruptcy filing. As per the company’s bankruptcy filing, Cyc Holdings had debt amounting to $7.5 million. Cyc Holdings filed an order to pay wages, compensation, as well as benefits to employees.
This California based company filed for bankruptcy on Oct. 14. At the time, the company permanently closed all its studios, but it continued with its live-stream and on-demand digital platforms – YogaWorks Live and MyYogaWorks. YogaWorks was owned by a private equity firm, and was delisted from trading on the Nasdaq in July 2019, after its shares failed to meet the minimum bid price requirement of $1.
Flywheel Sports (September)
This company filed for Chapter 7 bankruptcy on Sept. 14. At the time, the company closed its 42 studios and laid off its 1,200 employees. Founded in 2009, Flywheel has studios in several U.S. states, including Pennsylvania, Massachusetts, California, New York, North Carolina, Colorado, Florida and more. As per its Chapter 7 filings, it had $10 million to $50 million in liabilities, while its assets were less than $50,000.
Town Sports International (September)
This company filed for bankruptcy on Sept. 14. Town Sports was unable to pay outstanding revolver balances due in August. Also, it had a $177.78 million term loan facility due in November. The bankruptcy affected several Town Sports brands, including Washington Sports Clubs, Around the Clock Fitness, Total Woman, Boston Sports Clubs and more. Town Sports International Holdings was also delisted from trading on Nasdaq in October.
24 Hour Fitness (June)
This gym chain filed for bankruptcy in June 2020. When it filed for bankruptcy, it had a total debt of $1.4 billion, including $500 million in unsecured bond debt and $930.3 million in prepetition credit facility and rental expense for its clubs. 24 Hour Fitness emerged from Chapter 11 in December. The company eliminated $1.2 billion of funded debt, and now has an optimized cost structure.
Gold’s Gym (May)
This fitness chain filed for Chapter 11 bankruptcy on May 4. After the pandemic started, this global fitness brand had to temporarily close about 700 gyms globally and about 30 locations permanently. Gold’s Gym filing for bankruptcy came as a surprise because in 2019, the company made 22 American franchise agreements and opened 35 locations, a record for the company. A point to note is that Gold’s Gym bankruptcy was only for its corporate business and not franchisees.