BIG NEWS: Popular gym chain files Chapter 11 bankruptcy, closing locations
The fitness industry has undergone significant transformation since the onset of the COVID-19 pandemic in 2020. As businesses were forced to close nationwide, approximately 25% of gyms in the U.S. permanently shut their doors, according to the Health & Fitness Association. Among those struggling to regain footing is Blink Fitness, a budget-friendly gym chain owned by Equinox Fitness.
Bankruptcy Filing and Financial Struggles
On August 12, Blink Fitness filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The company is seeking to restructure its debt, a move attributed to the financial fallout from the pandemic. In its bankruptcy filing, Blink Fitness indicated that its troubles began when it had to close all locations for nine months, resulting in substantial lost membership revenue.
The company cited “liquidity constraints” and a backlog of rent payments due to the closures as significant contributors to its financial woes. Additionally, it acknowledged a “subset of underperforming clubs” that negatively impacted profitability over the past year. Blink Fitness reported assets and liabilities in the range of $100 million to $500 million, including approximately $280 million in debt.
CEO Guy Harkless stated, “Over the last several months, we have been focused on strengthening Blink’s financial foundation and positioning the business for long-term success.” He emphasized that utilizing a court-supervised process to optimize the company’s footprint and facilitate a potential sale is the best path forward for Blink.
Revenue Growth Amid Challenges
Despite these challenges, Blink Fitness reported a nearly 40% increase in revenue over the past two years, attributed to its affordable membership options ranging from $15 to $39 per month. This growth illustrates the brand’s ability to attract budget-conscious consumers despite the broader industry struggles.
Impact on Blink Fitness Members
As part of its bankruptcy proceedings, Blink Fitness plans to close approximately 10% of its gyms, primarily those located outside the New York City metro area. A spokesperson for the company confirmed, “The gyms that are closing are non-core to Blink’s footprint.” Affected members and staff have been informed, and efforts are underway to minimize the impact on employees and members.
In communications to its members, Blink reassured them that operations would continue as usual and that their gym experience would remain unaffected. “We understand that our members rely on our services, and meeting our commitments to you remains a top priority,” the company stated in an email.
As Blink Fitness navigates this challenging period, its focus on community and inclusivity remains central to its mission, aiming to ensure that it continues to serve its members effectively.
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