JUNE 15, 2020 — COMPANY FILES FOR CHAPTER 11 BANKRUPTCY, 100 LOCATIONS TO CLOSE
24 Hour Fitness has filed for Chapter 11 bankruptcy and has permanently closed 100 US locations in 14 states.
According to a company spokesperson, "If it were not for Covid-19 and its devastating effects, we would not be filing for Chapter 11. We expect to have substantial financing with a path to restructuring our balance sheet and operations to ensure a resilient future.”
The company has committed to "reinvestment in our existing clubs, opening new clubs and introducing several new innovative products and services."
Original post…
San Ramon, California-based 24 Hour Fitness, a chain of fitness centers, was in financial difficulty prior to the COVID-19 pandemic that has wreaked havoc on the U.S. economy as businesses were shuttered and individuals were instructed to "stay at home."
In announcing the appointment of a new Chief Executive Officer on January 15, 2020, a company spokesperson noted...
"'After an extensive strategic review and development of our company's new value proposition, the board came to the conclusion that the company required a different CEO skill set to achieve its transformational objectives,' said Roland Smith, Chairman of the Board of Directors at 24 Hour Fitness. 'With 25 years of demonstrated success across a diverse background of experiences in the consumer products, retail, and healthcare services industries, Tony has the unique skill set and experience required to execute on the strategic plans we have laid out to transform 24 Hour Fitness into the clear industry leader.'"
With transformational restructuring in mind, the COVID-19 pandemic forced the company to curtail operations which deepened its financial difficulties.
Therefore, it should come as no surprise that the company engaged Lazard and Weil, Gotshal & Manges, a prominent restructuring and financial engineering consultancy, to assist the company in exploring its options -- code words for selling the company or declaring bankruptcy to restructure debt.
Either way, it does not portend a bright future for employees who are often treated as fungible casual labor than valuable resources.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?