The fitness industry has never been the same since the Covid pandemic in 2020.
As the pandemic shut down businesses across the nation, the fitness industry suffered a major blow as 25% of gyms in the U.S. were forced to permanently close, according data from the Health & Fitness Association.
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One gym, which is known for its affordability, is still struggling to recover from the negative impact of the pandemic.
Blink Fitness, which is owned by Equinox Fitness, on Aug. 12 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware in Wilmington to restructure its debt after suffering from financial distress related to the Covid pandemic.
In the bankruptcy filing, Blink Fitness claims that the company’s financial struggles started after it was forced to close all of its stores during the pandemic, which caused it to lose out on membership revenue for nine months.
The club also revealed in the filing that it “suffered from liquidity constraints” as a result of the pandemic and is facing a backlog of rent payments that it had to put off due to the gym closures. It also said that it is dealing with “a subset of underperforming clubs” that has had “a significant negative impact” on its profitability over the past 12 months.
Blink Fitness listed $100 million and $500 million in assets and liabilities in its petition, including $280 million worth of debt.
“Over the last several months, we have been focused on strengthening Blink’s financial foundation and positioning the business for long-term success,” said Blink Fitness CEO Guy Harkless, in a press release that announced the bankruptcy.“ After evaluating our options, the Board and management team determined that using the court-supervised process to optimize the Company’s footprint and effectuate a sale of the business is the best path forward for Blink and will help ensure Blink remains the destination for all people seeking an inclusive, community-focused gym.”
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The company also revealed that despite the recent challenges, it has managed to increase its revenue by almost 40% over the past two years as it offers consumers affordable membership plans that cost around $15 to $39 per month.
What this means for Blink Fitness members
As a result of the bankruptcy filing, Blink Fitness, which has over 100 locations across the nation, has revealed that it will be closing a chunk of its locations.
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“We have made the decision to close approximately 10% of our gyms,” said a Blink spokesperson in a statement to Newsday. “The gyms that are closing are non-core to Blink’s footprint and predominantly located outside of the New York City metro area. We regret having to take this action but have already alerted the members and staff at the impacted gyms and are taking steps to minimize the impact on employees and members.”
The club also emailed its members saying that it will continue to “operate as usual” and that members should expect “no impact on their gym experience.”
“We understand that our members rely on our services, and meeting our commitments to you remains a top priority,” said Blink in the email to its members. “We will continue to operate as usual, putting our members and communities at the forefront of every decision we make.”
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