Gym owner Town Sports International has filed for bankruptcy protection in Delaware, citing a sharp drop in revenue due to pandemic-related closures of its facilities.
“We anticipate that the COVID-19 pandemic will continue to negatively impact our operating results in future periods,” the company said in a letter to its members.
Town Sports owns a number of gym chains, including New York Sports Club, Boston Sports Club, and Lucille Roberts. It has about 605,000 members and nearly 200 gyms, most of the gyms remained closed it said.
In June, Town Sports said it was considering strategic alternatives, including negotiating with existing lenders to meet upcoming debt maturities. Its 2013 revolving credit facility expired on August 15. Its 2013 term loan facility was due to mature on November 15, 2020.
“Town Sports International is not going out of business,” the company said. “Restructuring is the best way to properly respond to the COVID-19 pandemic, with the long-term goal to emerge as a thriving powerhouse in the fitness industry.”
Town Sports joins a growing list of gym operators that have sought protection from creditors as COVID-19-related social-distancing orders caused facilities to close or restrict capacity.
In May, Gold’s Gym filed for bankruptcy after closing about 30 stores, saying, “No single factor has caused more harm to our business than the current COVID-19 global pandemic.”
24 Hour Fitness filed for bankruptcy protection in June after announcing it planned to close 100 locations.
“If it were not for COVID-19 and its devastating effects, we would not be filing for Chapter 11,” chief executive officer Tony Ueber said at the time.
Meanwhile, the at-home fitness company Peloton reported its first ever quarterly profit last week after more than one million people subscribed to its streaming classes. Peloton said its sales increased more than 170%. Peloton shares are up more than 220% this year.
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