CNBC reports that popular gym chain 24 Hour Fitness is near the point of bankruptcy amid coronavirus.
Sources tell the network that executives for the gym have considered filing following a downgrade in credit rating by Moody’s, citing “negative membership trends, very high-interest burden and negative free cash flow prior to the coronavirus outbreak, as well as approaching maturities to provide limited flexibility to manage through the crisis.” The pandemic has forced 24 Hour Fitness to shutter 400 locations.
Related: An open letter to gay men desperate to use the gym
With gyms mandated to close due to social distancing guidelines, the company has also suspended membership fees, forcing it further into debt.
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At present, executives for 24 Hour Fitness have hired advisors at investment bank Lazard and law firm Weil, Gotshal & Manges to develop a plan of action for the coming months.
ScottOnEarth
Good riddance. 24 Hour is the shittiest, most low-rent gym on the planet. They couldn’t care less about anything other than squeezing money from their members. They took dues one month AFTER gyms were ordered closed, which is tantamount to stealing. They have no sense of customer service and almost all of their locations are filthy and the equipment is ancient.
Chrisk
They didn’t suspend my membership fees. Even as recently as last week. It’s not like we can cancel or suspend anything when they make a point of not answering the phone. Customer service does not exist.
Their excuse was will make it up to you when your membership ends. Ha Yeah, right. Good to know that some have been successful.
winemaker
I had a problem like this several years ago at a gym here in San Francisco. Bottom line, call your credit card company or bank credit card department, if it’s a bank issued card and dispute the charges or failing that, say your card was lost or stolen. That way the card account number is blocked from any further charges and you’ll be issued a new account number. The credit card issuer or bank will credit your card the charges and dispute them with the gym’s bank. .If you’re within a certain time frame of the original charge you can enforce this. BTW: this works well with incessant recurring charges say for a ‘product trial in which you just pay a shipping charge to try the product out without further obligation’ and can cancel anytime and you won’t be charged for future orders and we all know that when one of these companies get your credit card number and you want to cancel, they ignore your phone calls, line’s always busy and they don’t respond to emails and just keep sending you product and charging your credit card. You’re welcome
Chrisk
Thanks. I’m going to dispute it with my bank. They’re really good about siding with their customers anyways.
Josh447
I hope they recover. I’ve been with them forever and always have had a great experience. Traveling as often as I do I really like having them available everywhere I go. Big plus.
mz.sam
I’m with you, pal…been a life-long West Coast member. 24 totally ROCKS!!!
PLAYS WELL WITH OTHERS
Unfortunately I am very involved in this segment. Most gyms operate with razor thin margins. They seek high profile/traffic locations. $19.99 per month dues don’t pay incredibly high rent and overhead Many survive only thru Personal Trainer sessions and snack/smoothie bars. It’s going to be a tough transition once this madness subsides. .
• You don’t have to have a full set of dumbbells to stay somewhat fit. Get a lightweight dumbbell and instead of doing progressively heavier sets do higher higher reps (like 50+) you’ll still tear fibers to build muscle however you will plateau sooner and won’t see a lot of growth but you will maintain and not see significant loss of mass
jayjay333
I’m not an expert on how fitness centers operate financially, but most gyms (including the one I go to) are still charging members their monthly dues as usual and yet are not paying their employees who are not working for the past two months so how can they be losing money during this time? They still have membership dues coming in, they are not paying staff or electric bills etc. That makes no sense.
JPDonahue
Hopefully Planet Fitness will be next! At least the scuzzy one on Dyckman Street in NYC!
frapachino
I have no problem with them charging me for March April May even though we are shut down if it means keeping them in business! Not having the gym has been the hardest part of all this, I looked online for a dumbbell set but everyone is either sold out or back ordered through June!
jayjay333
Most of the larger chain gyms make plenty of $$. And if the crappy ones fail, a better one will take their place.
Doug
I agree completely. It’s definitely not a perfect gym franchise, but I sure miss the ellipticals. I’ve had a very reasonable membership with them for more than 20 years, I hope they don’t shut down so I have to go elsewhere and pay big bucks.
dtmidtrans
Good facility. I will try to come here
michel_banen
I’m a member of Anytime Fitness. Nothing but positive experiences with them. I will stay with them and they do anything including online sessions (that can be joined live and streamed again later) to keep their members fit.
Jim
They’re bankruptcy shows how poorly the place was run before the pandemic.
The economy is and on everyone, but for better or worse this pandemic is separating the wheat from the chaff.
Or in other words Darwinism is working in out capitalistic system.
Poncho Sanchez
There’s too much government intervention to say we live in a capitalist society……….hell, this whole shutdown is government intervention
Diplomat-G
So what you are telling us is that a large chain did not have enough reserves to weather a 45day close, That’s not the pandemics fault is the incompetence of corporate leadership that put them where they are.
Bob LaBlah
Well said. When I took Business 101 one of the things I remember most was that a well run business is prepared for an emergency. If they closed that many locations its obvious they were over expandeding and its management simply didnt care. I’ll bet there was a high turnover rate of management.
Chrisk
24 brought in 1.5 Billion in revenue last year. Plus, I see another 24 opening up just 2 miles from the gym I go to so none of this makes any sense.
Bob LaBlah
One would think that with all the steroid pumped up bodybuilders it has help produce over the last fifty plus years Gold’s Gym would be the most solid amongst all of them. It just closed thirty company owned locations and and even admitted that it was in rocky territory before the pandemic (it sounds like they were already looking for a buyer). That makes me wonder just how solid the gyms are of their franchisees. Planet Fitness aggressively moved into our area and began taking over locations at three long ago closed supermarkets. Two of them have halted construction and the third sits there like a cruel ghost as though from a long ago era even though it was only weeks away from opening. I went online a few hours ago just out of curiosity to check out the YMCA and was surprised at the modern equipment they have and the STEEP discount that they offer seniors, which I am. If I like what I see there when I visit I am joining once this is all over.
batesmotel
Then perhaps they should consider gradually opening the gym allowing a certain amount in until it’s safe to operate normally again. You can’t close businesses for this long and not give them financial aid. They didn’t choose to close. It was a mandatory close ordered by the government, so the government should pay. If they don’t, then let them re-open. It’s been a month, it’s safe enough, just open the gym already.
Chrisk
Clearly you’re getting your info from Fox News. Yeah, lets just open everything up so the economy gets back to business. So what if people die.
Diplomat-G
I find it laughable that when it comes to corporate bailouts people like you are pure socialist but when it comes to population safety nets you are all “pull yourself up by your bootstraps son.” Hypocrisy at its finest.
Bob LaBlah
Good luck with that wait. Most people spend one and a half to two hours in the gym and with social distancing in place NYC would see a lines stretching for miles as would L.A. Nothing is going to be the same until September at least. This is going to go down as the worst summer in memory for every Muscle Mary out there. No events or gatherings throughout the summer to show what the results are from practically moving into the gyms around mid February till June and many of those gyms are going to set their membership prices sky high once they open, bailout or not.
Kangol2
“Very high-interest burden and negative free cash flow prior” to the shut down; clearly they were leveraged up to their eyeballs and spending more than they were earning, and once the Trumpvirus crisis led to a shutdown, they couldn’t make those interest payments. Talk about Macroeconomics 101.