24 Hour Fitness Considers Bankruptcy As Gyms Remain Closed During Coronavirus Pandemic

As fitness centers and gyms remain closed because of the coronavirus, 24 Hour Fitness is reportedly considering filing for bankruptcy.

According to sources for CNBC, the gym chain is currently working with Lazard, an investment bank, and Weil, Gotshal & Manges, a law firm, to determine its financial options.

"You may also have seen news reports about the challenges facing the fitness industry and clubs, including 24 Hour Fitness," Tony Ueber, CEO at the company, said in a statement. "I expect there will be continued coverage and speculation about the actions we will take to continue operations. Regardless of any near-term challenges faced by 24 Hour Fitness and the fitness industry generally, I remain confident that we will reemerge stronger and better for the long term. Like many companies, we are looking at a number of different opportunities to work with our partners to improve and enhance value."

The company has an $837 million loan coming due in March 2022 and $500 million in unsecured notes maturing in June 2022, the news outlet said. Sales for the company hit about $.15 billion in 2019. The company has less than $1 million in cash, according to Moody’s (via CNBC).

The company shut down more than 400 club locations because of the COVID-19 pandemic in March, saying that closures may last for "an extended period of time."

Gym membership fees were to be suspended this week if it was unable to reopen.

24 Hour Fitness struggles against a series of rival gyms that have cheaper memberships such as Planet Fitness. The company is owned by AEA Investors. It was acquired by the firm in 2014, through a $1.8 billion deal with Fitness Capital Partners and Ontario Teachers’ Pension Plan.