After failed FlyWheel deal, New York Sports Club considers bankruptcy

The gym chain’s owner is mulling filing for Chapter 11

New York /
Apr.April 15, 2020 02:00 PM
Town Sports International CEO Patrick Walsh (Credit: JoJosh3131 and Ajay Suresh via Wikipedia)

Town Sports International CEO Patrick Walsh (Credit: JoJosh3131 and Ajay Suresh via Wikipedia)

New York Sports Club could soon be benched for good.

The gym chain’s owner, Town Sports International Holdings, is considering a potential Chapter 11 bankruptcy filing, according to Bloomberg. The chain has been in talks with lenders and advisors over a $200 million loan coming due in November.

The fitness chain had been hoping to pay down part of the loan by using financing from the acquisition of Flywheel Sports, an indoor cycling business. But those talks fell apart last week, Bloomberg reported.

Bankruptcy discussions for the chain haven’t come out of the blue. Town Sports — which operates gyms in New York, Boston, Philadelphia and Washington, D.C. — noted in its 2019 annual report that “substantial doubt exists as to our ability to continue as a going concern.” That was before the coronavirus pandemic led to government orders last month that gyms close.

Town shuttered 95 percent of its locations and borrowed $12.5 million from its revolving credit facility. It also became embroiled in legal battles with customers after Town continued to charge membership fees and allegedly made cancellation difficult despite its gym closures.

The company is far from alone when it comes to financial struggles. Neiman Marcus reportedly held discussions with lenders late last month about a potential bankruptcy loan. Earlier last month, Modell’s Sporting Goods was trying to stave off bankruptcy, though one source claimed the company was hoping another retailer would buy it following a Chapter 11 filing. In China, where the pandemic began, more than 100 real estate firms have filed for bankruptcy this year so far. [Bloomberg] — Erin Hudson


Related Articles

arrow_forward_ios
Theaters in some cities are opening with restrictions. (Getty, Photo Illustration by Alison Bushor for The Real Deal)
Coming attraction: Movie theaters reopen in New York, San Fran
Coming attraction: Movie theaters reopen in New York, San Fran
Restaurants and bars accounted for a majority of the gains in February (iStock)
Leisure, hospitality big winners in February job gains
Leisure, hospitality big winners in February job gains
(Getty, Photo Illustration by The Real Deal)
Retail had its reckoning. Will subleases flood the market?
Retail had its reckoning. Will subleases flood the market?
Ascena owns Ann Taylor, Lane Bryant, Lou & Grey and Cacique. (Getty)
Ascena restructuring approved post-bankruptcy
Ascena restructuring approved post-bankruptcy
NYSRA president Melissa Fleischut (Photos via iStock, Getty, NYSRA/Illustration by Kevin Rebong for The Real Deal)
Nearly 30% of New York restaurants expect to shutter in coming months
Nearly 30% of New York restaurants expect to shutter in coming months
Gov. Andrew Cuomo's emergency powers are about to go up in smoke (Getty, iStock)
Cuomo to lose shutdown power, but could still extend Covid restrictions
Cuomo to lose shutdown power, but could still extend Covid restrictions
Target CEO Brian Cornell. (Getty)
Internet, shminternet: Target adds, renovates stores as money pours in
Internet, shminternet: Target adds, renovates stores as money pours in
The comedy club argues that if SNL can operate, then they should be allowed to operate too. (Getty)
Manhattan comedy club sues Cuomo over pandemic closures
Manhattan comedy club sues Cuomo over pandemic closures
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...