If the pandemic has been a body blow to so many industries, fitness has been among the most utterly crushed. The requirement to isolate and distance socially caused gyms to temporarily shut down. Even with the loosening of government restrictions, that meant they had to operate at very low capacity. And, unlike restaurants and bars, health clubs weren’t offered any category-specific federal relief. Now, because of that, the National Health and Fitness Alliance is stating that one in four of all health clubs in the nation has now permanently shuttered since the virus began. As it turns out, now, one of the major national chains of fitness centers has succumbed to that pressure and done one better- it has now declared bankruptcy protection.
Based on a report from Bloomberg, Blink Fitness, a subsidiary of Equinox, has filed Chapter 11 bankruptcy within the last 72 hours. The company’s CEO described the filing as the most wise step: “Over the past several months, we’ve focused on strengthening Blink’s financial foundation and have taken steps to position the Company for long-term success. We want to thank our entire corporate and gym staff for their ongoing support of our members and our vendors and partners for continued support. We hope to emerge from this as a better business.”
Blink, being a company with over 300,000 customers, is trying to devise a strategy to resolve the debt. Despite having an increase of 40% in its revenue in the previous two years, it is also not known whether bankruptcy will lead to the closing down of any of its 101 gyms across the country.
The uncertainty over its future is keeping the members and its workforce a little nervous. Most of them are left asking if their local gym will end up falling in financial distress. There has been an expression of optimism by the company on the likelihood of tiding over bankruptcy and emerging stronger, but exactly what prevails for its 101 locations remains in suspense.
The whole fitness industry has been following the situation at Blink, as it may point to overall trends developing in the sector. The way the pandemic fundamentally changed customer behavior has left numerous gyms with reduced membership numbers and enlarged operational costs. Even as restrictions ease, the road to recovery for many has been protracted, and the damage, in some cases, may be irreversible.
The challenge is for Blink to restructure financially while keeping the trust and loyalty from the members. The company did say it will continue to run its gyms during the process, but didn’t specify how long that might be, or what changes could come from it.
Industry analysts said this bankruptcy could send the fitness sector among the stronger players into a round of consolidation that many see likely to absorb the weaker players. This could reshape the industry landscape, leaving only a fraction of alternatives to consumers and driving up membership costs.
As Blink moves through this challenging period, everyone will surely have their keen eyes on how it will handle its experienced debt, retain its members, and respond to the changed operating environment post-pandemic. Whether the company will emerge as a “more robust enterprise” as he hopes, or whether it will become another pandemic casualty, is hard to say.
This article was originally published on kfiam640. Read the original article.
FAQs
1. What caused Blink Fitness to file for bankruptcy?
Blink Fitness, for the most part, as directly impact the economic fallout from the COVID-19 pandemic, grossly depleted its revenue-generating capacity and hiking of operational expenses. The change in people’s lifestyle with regard to healthy living has also contributed to the unending setbacks of the gym franchise.
2. Will Blink Fitness shut down permanently?
For any club closure to be final. It has not been decided yet. Blink Fitness filed for Chapter 11 bankruptcy in order to restructure the business and its operations. Still, the future of some gyms has yet to be determined.
3. What do local gym members need to do to stay informed?
Blink Fitness is committed to keeping all of its members updated during the entire bankruptcy process. Members are still advised to keep checking the local gym website, email updates, and the official pages on social media for the latest information as it behaves to any changes or updates associated with the local Blink Fitness gym. More specific details and immediate concerns can also be resolved with direct contact to gym staff or customer service.
4. How will the bankruptcy of Blink Fitness affect the general fitness industry?
Blink Fitness’s bankruptcy could result in dire implications for the fitness industry at large. It will question the financial health of other fitness clubs as well and introduce the idea that more may be closing and consolidating soon. This speaks to only years of struggle for a fitness center and raises the need for a change in business models and further innovations with the correct adaptions in the field.
5. What are the alternatives for members in case their respective gyms are closed?
In the off chance that any of Blink Fitness locations do shut down, members will have to seek alternative fitness solutions. Most gyms will provide some flexible options for memberships. There are always available the most virtual and hybrid classes because offered by most gyms and local community centers, boutique fitness studios, and home fitness equipment. One alternative for them would be to see into other chains of gyms which are the same, if not similar, to Blink in their offering of amenities and services.