Town Sports International, the parent of New York Sports Club and Boston Sports Club, on Monday filed for Chapter 11 bankruptcy protection. The company plans to keep its gyms open as it works to restructure its debt.
The company had warned in early September that it had breached covenants under its loan agreements and may be forced to file for bankruptcy “in the near future.” The fitness chain operator also had previously warned of a possible bankruptcy filing in June.
Town Sports, which has about 600,000 members, said it isn’t planning to permanently close any of its nearly 200 locations. It started in New York City in 1973 as a small chain of squash clubs.
The filing in the U.S. Bankruptcy Court for the District of Delaware listed liabilities of $500 million to $1 billion.
In a statement to gym members, the company said:
“Town Sports intends to use the Chapter 11 process to engage in further discussions with their landlords and other creditors to successfully restructure their debts to best position the company for long-term success in the current fitness industry environment. This includes our New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs, Lucille Roberts, Total Woman, and Around the Clock Fitness brands. With Chapter 11, companies generally seek a seamless transition in operations upon a filing, so our members will not recognize a break in service. Town Sports International is not going out of business. 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. The goal is to emerge from Chapter 11 as an even stronger company, better positioned to serve members into the future. Town Sports will continue to operate its facilities as usual throughout this process, and members should not notice any changes to their fitness journeys. To ensure we operate in a safe and calculated manner, we will continue to reopen clubs as well as certain amenities in a ‘phased’ approach as we evaluate the best time and locations. We are committed to making Town Sports International success and rewarding the trust our members and employees have in us to deliver excellence focused on safety and service. We are deeply grateful for your continued loyalty and we are excited to continue supporting you along your fitness journey well into the future.”
Gold’s Gym and 24 Hour Fitness filed for bankruptcy earlier this year in part due to restrictions caused by the pandemic. New York and New Jersey allowed gyms to begin reopening earlier this month, but at reduced capacity and with other safety precautions.”
Photo courtesy New York Sports Club