- According to court documents, Gold’s Gym International has filed for bankruptcy in Dallas, citing as much as $100 million in assets and liabilities.
Gold’s Gym International Inc. requested insurance from its creditors, unable to keep up with loan payments after the coronavirus outbreak triggered a prolonged shutdown.
According to court documents, the Gold’s Gym filed for bankruptcy in Dallas, citing as much as $100 million in assets and liabilities. Chapter 11 bankruptcy allows a company to continue to operate as it figures out a plan to pay lenders and relieve its burden.
Gold’s blamed the pandemic for bankruptcy which forced the shutdown of its fitness studios. Even before the virus shuttered the global economy, a number of gym chains struggled with onerous debt.
“It was a complete and utter blow to any of our operating practices, and we had to take immediate, decisive steps to bring us back on track,” the company said in prepared remarks.
Gold’s, dating its history back to 1965, opened as a gymnasium in Venice, California. According to its website, it currently runs more than 700 gyms around the world. The firm will close about 30 company-owned gyms through the bankruptcy process, primarily in the markets of St. Louis, Alabama, and Colorado Springs, it said. According to the company website, gyms run by franchisees won’t be impacted by the restructuring.
The company will also attempt to sell itself, according to court papers, under terms offered by TRT Gym Asset Holdings LLC. TRT Holdings Inc., Gold’s Gym’s controlling shareholder, is in negotiations with the company over the terms of a debtor-in-possession and exit loan to get it through the restructuring.
The organization is aiming to restructure and emerge from the bankruptcy by August of this year or earlier through its pre-negotiated strategy. During the bankruptcy, according to the announcement, Gold’s will attempt to reopen gyms that were closed due to Covid-19.
After askedabout the effect of Bankruptcy filed by Gold’s Gym International on Indian franchise, Gold’s Gym India COO, Nikhil Kakkar said- “This is about restructuring happening in the USA incorporate gym business and has nothing to do with international/ national or licensing business of the brand. Also, chapter 11 filing is bankruptcy protection which people have interpreted.”
Covid19 has already affected a lot of businesses. Travel, Fitness, and Dining remain severely affected ones. Recently, Airbnb has to layoff 25% of employees across the world due to diminishing revenue.
