MAY 4, 2020 — GOLD’S GYM FILES FOR BANKRUPTCY
The company has announced that it filed for Chapter 11 bankruptcy on May 4, 2020.
According to a company spokesperson,
“We are filing this to restructure the company, and this is strictly as a result of the pandemic. We were on a massive turnaround. We were refranchising stores, awarding company-owned stores to franchisees. We were all over the place growing our business. We were ahead of plan for the year.
And then COVID-19 hit, and this is simply our way of acting swiftly to ensure we have a long-term viable and sustainable business. We went from having a strong revenue stream and growing our business in 2020 to having nothing.
This is the right thing for Gold’s Gym so that we can be much more viable after this pandemic ends “We want to get ahead of this. We have the fiduciary responsibility to make sure we have a company and a brand here for our members, for our franchisees and for the community for the next 55 years and longer. That’s the whole reason we’re doing this. It’s about how do we continue to grow through franchising, grow that business, grow our licensing business as well as maintain a very solid set of company-owned gyms.”
Original Post…
Dallas, Texas-based Gold's Gym, the iconic gym and fitness center started in Venice, California, has announced that it will be permanently closing approximately 32 corporate locations and laying off hundreds of employees. Hundreds of employees will be subject to layoff.
In a published statement, the company noted, "Gold’s Gym has been the world’s trusted fitness authority for more than 50 years, and we’re absolutely not going anywhere. While the COVID-19-related closures have caused us to reassess the viability of some company-owned locations and make the difficult decision to permanently close about 30 gyms, we know that we will emerge from this stronger and ready to grow. This decision affects only company-owned gyms and does not have an impact on any of our franchisee-owned gyms."
As for the temporary closures of other corporate locations, company CEO Adam Zeitsiff noted, "This is not a business decision but a humanity decision/ We want to protect our community and people of all ages by doing what we can to flatten the disease's curve. To fight this virus, we have to stand firm with everyone who is working to contain the spread. We are truly stronger together."
It appears that the COVID-19 pandemic might have a major effect on the company’s revenues as individuals decide they no longer need a full-time gym membership or have found alternative exercise sources. Since most fitness operations are dodgy when it comes to cancelations and refunds, cashflow can be severely impacted in the future should refunds become mandatory under state law.
To offset potential losses to at-home exercisers, the company is offering "free premium access for members and non-members to GOLD'S AMP, the company's digital personal training app, through May 31, 2020."
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?