Gold's Gym Files for Bankruptcy Protection
Gold Gym’s comes as another big company to file for bankruptcy protection as it struggles due to COVID-19 lockdowns. This move means that the company would permanently close 30 locations owned by the company.
There are 700 gyms worldwide that operate under the Gold’s brand under franchise.
“We want to be 100 percent clear that Gold’s Gym is not going out of business,” said President and CEO Adam Zeitsiff in a press release. “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.”
Zeitsiff mentioned “To be clear, the filing should not impact our licensing division, it is not associated with any of our locally-owned franchise gyms, nor will it prevent us from continuing to support our system of nearly 700 gyms around the world. While the COVID-19 pandemic certainly impacted our company-owned gym operations, we expect the filing will have no further impact on current operations.”
Chapter 11 bankruptcy protection allows a company to continue to operate as it works out a plan to stay in business.
Joe Gold opened his first gym in Venice Beach, California in 1965. It caught popularity after it was featured in the 1977 docurama Pumping Iron which featured the great Arnold Schwarzenegger.
Gold Gym’s bankruptcy comes after J.Crew became the first major US retailer to file for bankruptcy protection due to COVID-19. J. Crew had been struggling with debt and low sales before the pandemic. It’s main creditors will take control of the group in exchange for cancelling it’s debt of $1.65 billion.
With this deal, $400m of financing will be made available to keep operations afloat. 500 stores have been closed and some will not reopen.