Gym chain 24 Hour Fitness is filing for bankruptcy and permanently shuttering about 130 clubs, including 13 in the Bay Area.
The San Ramon company said Monday in a Chapter 11 filing that it had secured about $250 million in financing from its creditors to resume business at about 300 locations, most of which will reopen by the end of June. It has about $1.4 billion in debt plus lease obligations. It is is not charging membership fees while locations are temporarily closed.
Its largest creditor by far is Wells Fargo. The San Francisco bank has an unsecured claim of $500 million, 24 Hour Fitness said in its bankruptcy documents.
“If it were not for COVID-19 and its devastating effects, we would not be filing for Chapter 11,” said CEO Tony Ueber in a statement. “With that said, we intend to use the process to strengthen the future of 24 Hour Fitness for our team and club members, as well as our stakeholders.”
The permanent closures include four clubs in San Francisco, and one each in Alamo, Berkeley, San Jose, Fairfield, Fremont, Milpitas, Morgan Hill, Vallejo and Walnut Creek. The San Francisco closures are at 2145 Market St., 350 Bay St., 3800 24th St. and 3951 Alemany Blvd.
The San Ramon company’s website said members could work out at any reopened location throughout 2020, even if their membership type would not ordinarily allow them to do so. The permanent closures affect gyms in 13 states besides California.
The $100 billion fitness industry is particularly hard hit by the coronavirus pandemic. People often pant or breathe heavily as they exert themselves, raising fears of viral transmission in an enclosed space — and many have turned to at-home equipment.
Gold’s Gym, another national chain, filed for Chapter 11 bankruptcy on May 5. It has permanently shutters about 30 of its 700 gyms.
The company temporarily closed all its 400-plus gyms March 16 and introduced a virtual fitness experience on YouTube.
Some aim to reopen soon: The Super Sport Gym in Santa Rosa, for example, is slated to reopen June 22, and one in Larkspur says on its website it will reopen June 29. Gyms in San Francisco — those that are not permanently closed, that is — are slated to reopen on Aug. 1, the company’s website says.
California allowed fitness facilities in some counties, along with swimming pools, movie theaters, hotels and museums, to reopen on Friday, June 12, with guidelines for social distancing and sanitation. Most Bay Area counties, however, are moving more slowly.
The company did not say how many layoffs would result from the closures.
Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid
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June 16, 2020 at 02:42AM
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24 Hour Fitness files for bankruptcy, closes more than 100 gyms - San Francisco Chronicle
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