24 Hour Fitness in talks with bidders ahead of bankruptcy

The mid-tier gym chain was struggling before the pandemic set in

National /
Jun.June 05, 2020 12:18 PM
24 Hour Fitness CEO Tony Ueber (LinkedIn, Getty)

24 Hour Fitness CEO Tony Ueber (LinkedIn, Getty)

24 Hour Fitness is in talks with entities to find a stalking horse bidder ahead of a court-supervised bankruptcy.

The mid-tier fitness chain, which operates more than 430 gyms, is seeking the stalking horse bidder before it files for bankruptcy, Bloomberg reported. The possible Chapter 11 filing would cut the company’s debt and put lenders in control. Investment bankers at Lazard and attorneys at Weil, Gotshal & Manges are advising the gym on the process.

“24 Hour Fitness is productively engaged with its creditors to explore strategic options and ensure the company is well positioned to serve its members nationwide for the long-term,” a spokesperson for the gym operator wrote to Bloomberg.

Gyms were hit hard by the pandemic — New York Sports Club is also considering filing for bankruptcy, and a market research firm estimated that the fitness industry could shrink from an $85 billion industry to a $45 billion industry this year.

But 24 Hour Fitness’ troubles predate the widespread stay-at-home orders and social distancing. Last year, it reported a 2 percent decline in revenue in its unaudited fourth-quarter earnings report, and membership dropped from 3.5 million to 3.4 million from the second to third quarter last year.

The company was also saddled with $1.3 billion after a leveraged buyout in 2014 by AEA Investors and a Canadian pension fund. Talks to restructure that debt load failed in March, just as the pandemic set in. [Bloomberg] — Georgia Kromrei


Related Articles

arrow_forward_ios
Foot traffic in Union Square, the Flatiron District and Chelsea is down by 50% from February. (Getty)

Foot traffic remains low in prime Manhattan neighborhoods

Foot traffic remains low in prime Manhattan neighborhoods
About 25 percent of employees had returned to work as of Nov. 18 (Getty; iStock)

Offices remain empty, and big cities are feeling the crunch

Offices remain empty, and big cities are feeling the crunch
Singapore (iStock)

Singapore luxury market rebounds despite fewer foreign buyers

Singapore luxury market rebounds despite fewer foreign buyers
The tax break allows foreign visitors to reclaim a sales tax of 20 percent on items bought in the country for more than £30 (Getty; Unsplash)

UK tax break expiration could hurt struggling retailers

UK tax break expiration could hurt struggling retailers
As workers trade in suits for sweatpants, 1 in 6 dry cleaners has closed or gone bankrupt (Getty)

Pandemic takes drastic toll on dry cleaners

Pandemic takes drastic toll on dry cleaners
Cineworld Group CEO Mooky Greidinger and Regal Cinema (Photo via Getty; Wikipedia)

Regal Cinemas scores financial rescue package

Regal Cinemas scores financial rescue package
(iStock)

What doom-and-gloom forecasts miss about the office market

What doom-and-gloom forecasts miss about the office market
Union Square Hospitality Group CEO Danny Meyer and the Union Square Cafe (Photos via Getty; Wikipedia Commons)

Danny Meyer’s Union Square Hospitality halts indoor, outdoor dining

Danny Meyer’s Union Square Hospitality halts indoor, outdoor dining
arrow_forward_ios

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

Loading...