Youfit files for bankruptcy amid pandemic
Toll on fitness centers increases
The pandemic’s toll on fitness centers is growing with another chain— Youfit Health Clubs LLC — filing for Chapter 11 bankruptcy protection.
The business, with 85 locations in 10 states, is based in Deerfield Beach and operates 61 clubs in Florida, including 40 in Miami-Dade, Broward and Palm Beach counties.
Youfit has not disclosed whether any locations will close, but with COVID-19 cases once again soaring in Florida and nationwide, Youfit is one of several fitness chains trying to stay a float until a vaccine arrives.
Others that have filed for bankruptcy since the pandemic began include Gold’s Gym International, Yoga Works, Cyc Fitness, Flywheel Sports, and 24 Hour Fitness.
Anda coalition of smaller chains, including two based in South Florida, this week asked Congress to make sure that gyms will be included in any new economic relief measures under consideration.
Prior to filing in Delaware Bankruptcy Court on Monday, Youfit reached a
deal to sell itself to lenders for $75 million, Bloomberg reported. Lenders would assume ownership of the company in exchange for forgiving its debt. The deal is subject to court approval.
The company, founded in 2008 in St. Petersburg, reported assets between $50 million and $100 million and liabilities between $100 million and $500 million. Bank of America is listed as the company’s largest creditor with $10 million owed to it. Most major other creditors are landlords.
Gyms in most parts of Florida were allowed to reopen in May at reduced capacity with strict requirements for mask wearing and disinfecting machines and equipment. Currently, masks are not required in most counties while exercising, except in Miami-Dade County. Yet many former patrons have shunned their traditional gyms, leery about catching the virus from an infected member’s heavy breathing or sweat.
South Florida gym patrons have filed dozens of complaints alleging that gyms failed to adhere to safety protocols.
Meanwhile, exercisers leery of returning to public gyms have continued their at-home workout routines, boosting sales of home workout equipment like spinning machines, bicycles, treadmills and weight sets. Exercise equipment maker Nautilus Inc. reported in August that quarterly sales increased94% in the second quarter of the year, while high-tech fitness manufacturer Peloton recently announced a 172% sales boost and its first-ever quarterly profit.
In South Florida, Youfit operates gyms in Boca Raton, Boynton Beach, Coconut Grove, Coral Springs, Dania Beach, Davie,
Deerfield Beach, Greenacres, Hialeah, Hollywood, Lantana, Lauderdale Lakes, Margate, Miami, Miami Gardens, North Lauderdale, Oakland Park, Pembroke Pines, Pompano Beach, and Sunrise.
Youfit rose to prominence by marketing a no-frills discount membership similar to rival Planet Fitness. Memberships cost $10 a month per person, plus an annual fee of $39.99.
The bankruptcy filing will enable the chain to remainin operation, spokesman Evan Nierman said ina statement released by the company.
“As it did for many industries, including other health clubs, the pandemic hit Youfit hard, and we have made the decision to restructure the company through a bankruptcy filing as away to continue operating and providing an uplifting fitness experience to our loyal members,” the statement said. “Over the last few months, our clubs have reopened across the country with new stringent safety protocols, and it has been truly inspiring to see our members back in the clubs.”
Other members of the health club industry do not share Nierman’s upbeat assessment.
The Community Gyms Coalition, representing so-called boutique fitness centers, this week released a statement calling upon Congress to include the fitness industry in any post-election relief legislation it considers. The coalition cited an analysis by the International Health, Racquet & Sportsclub Association that found a quarter of all fitness facilities— roughly 10,000 gyms — could close at the end of the year without relief.
Companies identified as “rallying” behind the call for relief spending include Orangetheory Fitness based in Boca Raton, and Zumba Fitness, headquartered in Hallandale Beach.