Gyms and fitness clubs have had it tough since the Covid-19 pandemic drove the industry to a halt. Now, another gym chain has filed for bankruptcy amid Covid-related debt.
Blink Files for Bankruptcy
These days, finding an affordable gym membership is no walk in the park – and it may be about to get harder. This week, the low-cost fitness chain Blink Fitness filed for Chapter 11 bankruptcy as it seeks to sell the company to a new buyer.
Owned by Equinox
Blink is owned by Equinox, a New York-based luxury fitness and health club, and oversees 101 gyms across New York, New Jersey, California, and Texas. More than 400,000 Americans hold Blink memberships.
$21 Million in New Financing
The company confirmed in a public statement on Monday that while it is filing for bankruptcy operations will still continue, thanks in large part to $21 million in financing that it has recently received.
Gym Closures Unclear
Whether Blink will have to close some of its 101 locations is still unclear, but it expects the filing to have “limited impact on day-to-day operations.”
Underperforming Locations
Court filings made in Delaware indicate that some underperforming locations could close in the future, but whether this is confirmed has yet to be seen. While they weren’t named, some locations have been confirmed to be unprofitable.
Expectations for Sale
Blink expects that the bankruptcy filing will expedite the sales process and better set up the company for long-term success.
Keeping the Company Stable
Thanks to this extra financing, the company can also ensure that its vendors are paid and its approximately 2,000 employees will stay on board with the same pay and benefits as before.
Strengthening Its Financial Position
“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.
“The Best Path Forward”
“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,” he continued.
Pointing Out Success
In the same statement, the company also emphasized its successes in recent years, pointing to a nearly 40% increase in revenue over the past two years.
$280 Million in Debt
However, the fitness line is also approximately $280 million in debt, according to Reuters. It has previously linked this debt to the ongoing impacts of the COVID-19 pandemic, which shut down gyms across the US – some temporarily, others permanently.
25% of Gyms Closed
According to the US trade group Health & Fitness Association, close to 25% of gyms and studios permanently closed across the US in a devastating blow to the fitness industry.
Covid Impacts Linger
Blink was one of many fitness companies that were crippled by pandemic lockdowns. The company confirmed in its bankruptcy filings that it was still catching up to late rent payments that it could not pay off during its 9-month pandemic closure.
Post-Covid Pains
Rick Caro, president of health & fitness consulting firm Management Vision, told CNN that the Blink bankruptcy announcement was “a sign that this is an industry still going through growing pains post-Covid.”
Retail and Hospitality Bankruptcy
It’s not just health and fitness – mass bankruptcy and store closures have plagued the retail and hospitality sectors in the last two years.
The Future is Unclear
The company’s current optimism concerning its future may bring relief to members, but there is no guarantee that the gym will retain its ‘low cost, high value’ model going forward.
“All-Inclusive and Inviting”
Since it opened in 2011, Blink Fitness has marketed itself as an “all-inclusive and inviting” place that welcomes everyone and provides gym access for some who may otherwise be unable to afford membership.
Low-Cost Membership
Currently, Blink Fitness memberships cost as little as $15 and as much as $45 per month, attracting members with its accessibility.
Lower Than the Average
According to the data-gathering platform Statista, the average gym membership cost is anywhere between $38 and $75 per month as of 2021, with New York being the most expensive state for gym memberships.
Equinox Brands
Blink Fitness is just one of many fitness and lifestyle brands that fall under the Equinox umbrella – the company also owns SoulCycle, Precision Run, Equinox Fitness, and Pure Yoga, among others.
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