24 Hour Fitness files for bankruptcy as it closes 18 SoCal gyms – Daily News

on Jun15
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The 24 Hour Fitness has filed for bankruptcy protection and closed many of its gyms — including 18 in Southern California — as part of a bet that a smaller company with less debt can overcome its business challenges.

The company said on Monday, June 15, it will reopen its remaining gyms as part of a plan to retool the chain in a competitive business climate made on tougher by mandated business restrictions and consumer fears due to coronavirus.

“This process gives us the opportunity to reposition 24 Hour Fitness by eliminating debt and closing clubs that were either out-of-date or in close proximity with other 24 Hour Fitness clubs,” a company statement said. “Removing these financial and operational constraints allows us to focus entirely on transforming our business and the club experience for the better. We will have the financial flexibility and resources to upgrade equipment and expand and improve our fitness offerings to best serve our members and continue our transformational journey.:

To ease consumer concerns, the 24 Hour Fitness also announced health and safety efforts to lower visitors’ concerns about coronavirus’ spread and temporarily broadened its membership so “all members will have access to any available 24 Hour Fitness club through the end of 2020, regardless of membership level.”

The pandemic was a final blow to the company’s finances as it struggled against competition from both cheaper and fancier gyms.

Bloomberg News reported in May that the chain’s parent company, 24 Hour Fitness Worldwide Inc., was in talks with investors over the terms of a loan that would keep the company operating through a bankruptcy court restructuring. Even before the pandemic, the operator of more than 400 gyms before the closings, had $1.3 billion of debt stemming from a leveraged buyout by AEA Investors and the Ontario Teachers’ Pension Plan in 2014.

Southern California gyms closed are:

• Downtown LA-6th Street, 505 S. Flower Street in Los Angeles

• Glendale, 240 North Brand Blvd in Glendale

• Hawaiian Gardens Super Sport, 12120 Carson Street in Hawaiian Gardens

• Montclair Active, 9750 Central Avenue in Montclair

• Moreno Valley Fit Lite, 23750 Alessandro Blvd in Moreno Valley

• Palmdale West, 1335 Rancho Vista Blvd in Palmdale

• Pasadena, 465 North Halstead Street in Pasadena

• Simi Valley-Tapo Active Dry, 2350 Tapo Street in Simi Valley

• South Hills Plaza Active, 1422 Azusa Avenue in West Covina

• The Promenade Super Sport, 1417 Second Street in Santa Monica

• Victorville, 16200 Bear Valley Road in Victorville

• Anaheim Garden Walk, 400 W. Disney Way, Suite 94 in Anaheim

• Costa Mesa, 1600 Adams Avenue in Costa Mesa

• Fountain Valley, 18305 Brookhurst Street in Fountain Valley

• Irvine Spectrum Sport, 517 Spectrum Center Drive in Irvine

• Laguna Hills, 25252 McIntyre Street, Suite A in Laguna Hills

• Lakeshore Towers Ultra Sport, 18007 Von Karman Avenue in Irvine

• Westminster Active, 6731 Westminster Blvd. in Westminster

California’s Stage 3 reopening plan, in effect as of June 12, allows gyms, bars, communal swimming pools, movie theaters and hotels and museums to reopen as long as guidelines for social distancing and sanitation are followed.

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