The parent company of New York Sports Clubs and Lucille Roberts gyms,Town Sports International Holdings, has filed for Chapter 11 protection in the wake of a cash flow shortage due to the pandemic.
The gym is not closing up shop, however. It instead plans to restructure and "emerge as a thriving powerhouse in the fitness industry," it said on its website. It will continue to operate its facilities, which are mainly located on the East Coast, as it works its way through the bankruptcy process.
In other statements, the gym has warned shareholders that it was struggling due to closures related to the pandemic.
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"The pandemic has caused unprecedented economic volatility and uncertainty which has negatively impacted our recent operating results," it said earlier this month. "We anticipate that the COVID-19 pandemic will continue to negatively impact our operating results in future periods."
In general gyms have been hard hit from the pandemic with most forced to close and many still waiting for government permission to re-open. It has been another blow for the retail sector because before Covid-19 retail centers saw gyms as an excellent way to backfill space that had been shuttered by department stores or dark anchors.
With the closures, though, and health advice suggesting people avoid the close-in experience of a gym, they've been hemorrhaging revenue. Some national gyms, including Gold's Gym International and 24-Hour Fitness Worldwide, have filed bankruptcy, forcing hundreds of health clubs to close completely.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
