Gold’s Gym filed for Chapter 11 bankruptcy protection Monday as the fitness chain deals with the closure of outlets across the country due to coronavirus. The filing does not involve franchise-owned gyms and the company expects to emerge from bankruptcy proceedings by August.
The company recently announced the permanent closure of about 30 U.S. company-owned gyms, driven by the COVID-19 crisis. Only about 10 percent of the company’s roughly 700 locations around the world are company-owned.
“We want to be 100 percent clear that Gold’s Gym is not going out of business,” said Gold’s Gym President and CEO Adam Zeitsiff in a statement “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.”
Gold’s Gym, a unit of the closely held Dallas investment firm TRT Holdings, noted that gyms and fitness centers temporarily closed during the COVID-19 shutdown are listed in Phase One of the White House plan to reopen the U.S. economy, and the filing will not impact reopening plans or current operations for company-owned Gold’s Gym locations.
“Gold’s Gym has been the world’s trusted fitness authority for more than 50 years, and we’re absolutely not going anywhere,” said Zeitsiff. The filing was made in U.S. Bankruptcy Court in Dallas, according to Bloomberg.
Gold Gym said in a statement on its website, “This pre-negotiated filing will enable us to emerge stronger and ready to grow, and it is our intent to be on the other side of Chapter 11 by August 1, if not sooner.
“The global COVID-19 pandemic spurred us to take immediate action, including the difficult but necessary decision to permanently close about 30 company-owned gyms, to maintain the strength and growth of the potential of the brand as well as ensure the continued viability of the company for decades to come. We have been working with our landlords to ensure that the remaining company-owned gyms reopen stronger than ever coming out of this pandemic.
“To be clear, the filing should not impact our licensing division, it is not associated with any of our locally-owned franchise gyms, nor will it prevent us from continuing to support our system of nearly 700 gyms around the world.
“While the COVID-19 pandemic certainly impacted our company-owned gym operations, we expect the filing will have no further impact on current operations.
“As part of the company’s typical “first-day” restructuring requests, the company will be seeking court approval to continue paying suppliers, vendors, and employees in the ordinary course on a go-forward basis.”
Photo courtesy Golds Gym
