Gold’s Gym to Restructure Under Chapter 11 due to COVID-19
Gold’s Gym announced it has filed voluntarily petitions for relief under Chapter 11 in an effort to facilitate the financial restructuring of the company. The filing will only impact company-owned gyms, which amount to around 10% of the brand’s 700 locations.
“Gold’s Gym has been the world’s trusted fitness authority for more than 50 years, and we’re absolutely not going anywhere,” said president and CEO Adam Zeitsiff in a statement. “This pre- negotiated filing will enable us to emerge from this global pandemic stronger and ready to grow, and it is our intent to be on the other side of Chapter 11 by August 1, if not sooner.”
Privately held Gold’s Gyms recently announced the permanent closure of 30 company-owned locations due to the coronavirus pandemic. The bulk of these locations are in St. Louis, Alabama and Colorado Springs. While this move was difficult for the company, they said it was necessary to maintain the strength and growth potential of the brand.
According to a media release by Gold’s Gym, they do not anticipate the filing to affect franchised-owned gyms in any way. “We want to be 100 percent clear that Gold’s Gym is not going out of business,” continued Zeitsiff. “The brand is strong, and we’ll continue to innovate and grow our digital business, our licensing program and our global footprint as we focus on serving our millions of members across the world.”
On March 16, Gold’s Gym temporarily closed all of its corporate-owned locations in response to the coronavirus, however some are beginning to reopen in states like Tennessee. Temporary closures of franchised locations were decided upon independently by franchise owners and dependent upon state laws.