Popular gym chain files Chapter 11 bankruptcy, closing locations

According to The Street, The fitness industry has faced unprecedented challenges since the onset of the COVID-19 pandemic in 2020. The pandemic’s impact was severe, leading to the permanent closure of 25% of gyms across the U.S., according to the Health & Fitness Association.

Blink Fitness Files for Chapter 11 Bankruptcy

Blink Fitness, known for its affordability and owned by Equinox Fitness, has joined the list of struggling fitness companies. On August 12, the gym chain filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The company is seeking to restructure its debt following significant financial distress exacerbated by the pandemic.

In its bankruptcy filing, Blink Fitness attributed its financial woes to the forced closure of all its locations during the pandemic, which resulted in a nine-month loss of membership revenue. The gym also reported facing liquidity constraints and a backlog of rent payments that had been deferred due to the closures. Additionally, Blink Fitness has been impacted by a number of underperforming clubs, which have significantly hurt its profitability over the past year.

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The company listed between $100 million and $500 million in assets and liabilities, with $280 million of that amount being debt.

Efforts to Restructure and Future Plans

“Over the last several months, we have been focused on strengthening Blink’s financial foundation and positioning the business for long-term success,” said Guy Harkless, CEO of Blink Fitness, in a press release announcing 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.”

Despite these challenges, Blink Fitness has managed to increase its revenue by nearly 40% over the past two years by offering affordable membership plans ranging from $15 to $39 per month.

Impact on Blink Fitness Members

As part of its bankruptcy proceedings, Blink Fitness, which operates over 100 locations nationwide, will be closing approximately 10% of its gyms. “We have made the decision to close approximately 10% of our gyms,” a Blink spokesperson said 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.”

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Blink Fitness has assured its members that the bankruptcy will not disrupt their gym experience. “We understand that our members rely on our services, and meeting our commitments to you remains a top priority,” the company said in an email to members. “We will continue to operate as usual, putting our members and communities at the forefront of every decision we make.”