Town Sports International Holdings Inc., the owner of fitness centers such as the New York Sports Clubs and Total Woman Gym + Spa, has filed for Chapter 11 bankruptcy protection as a result of the extended downturn in new gym memberships owing to the prolonged coronavirus pandemic.
The company filed for bankruptcy at a New York bankruptcy court Monday and said the extended shutdown of its gyms nationwide was the main reason for its decision.
The New York-based fitness center operator joins a growing number of gym operators that have fallen victim to the monthslong disruptions caused by the pandemic. While some gyms have reopened, others have decided to seek court protection from creditors after incurring large debts during the health crisis.
In May, Gold's Gym International, Inc. filed for bankruptcy protection. The company was followed in June by 24 Hour Fitness. While traditional fitness centers struggled during the crisis, home workout companies and equipment manufacturers such as Peloton experienced growth as consumers were forced indoors.
In a post on its website, Town Sports told members it would be business as usual during the bankruptcy process. It said the company wasn't going out of business but was restructuring in response to changes in the business environment owing to the pandemic. As well as New York Sports Clubs and Total Woman Gym, Town Sports owns and operates Boston Sports Clubs, Washington Sports Clubs, Lucille Roberts, Philadelphia Sports Clubs and TMPL Gym.
Town Sports suggested in August it was in the process of filing for bankruptcy. The company said then it was attempting to secure refinancing deals with several lenders. It said liquidity was quickly running out and it had significant debt falling due between September and December.
The company, which had about 600,000 members before the pandemic, said it had no plans to close any of its approximately 200 locations nationwide. Most of the company's gyms have now reopened - albeit in a limited capacity. Like other gyms, Town Sports has equipped locations with safety precautions to mitigate the spread of the disease.
