Gold's Gym, one of the world's most recognizable chain of fitness centers, has filed for Chapter 11 bankruptcy protection. It allows businesses to keep operating "but need time to restructure their finances," according to Debt.org.
In a statement posted on its website, Gold's Gym management said its 700 gyms worldwide will remain open as it looks to restructure because of the COVID-19 pandemic. The company permanently closed 30 company-owned gyms in April in the wake of the virus outbreak.
"The global COVID-19 pandemic spurred us to take immediate action, including the difficult but necessary decision to permanently close about 30 company-owned gyms, to maintain the strength and growth of the potential of the brand as well as ensure the continued viability of the company for decades to come," it said in the statement. "We have been working with our landlords to ensure that the remaining company-owned gyms reopen stronger than ever coming out of this pandemic."
However, the company added that the bankruptcy filing will not have an effect on its licensing division and locally owned franchise gyms. It also said it will continue to support its system of nearly 700 locations globally.
"This pre-negotiated filing will enable us to emerge 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," it said.
"We want to be 100% clear that Gold's Gym is not going out of business," president and CEO Adam Zeitsiff said in a Q&A on the website. "Gold's Gym will continue to own and operate gyms across the United States, and we will continue to support our licensing division and franchisee network of nearly 700 gyms all over the world. Franchisee-owned Gold's Gym locations, which make up the bulk of our global footprint, are not part of this filing and should not be affected by or tied-to this in any way.
"2019 was our strongest year of worldwide growth in company history," Zeitsiff added. "No single factor has caused more harm to our business than the current COVID-19 global pandemic and the temporary closures required to protect the safety of our members, team members and communities. Filing for Chapter 11 was the best option to maintain the strength and growth potential of the brand as well as ensure the continued viability of the company for decades to come."
Gold's Gym founder Joe Gold opened the first location in California in 1965. Today it counts franchises in Russia, India, Australia, Costa Rica, Japan, the United Kingdom, Netherlands, Germany, Egypt, Saudi Arabia, Mexico, Peru, Indonesia, Spain, Poland, Venezuela, Mongolia, and the Philippines.
There are 26 branches of Gold's Gym in the Philippines, and all have been closed since the start of the enhanced community quarantine.
Gold's Gym Philippines president and CEO Mylene Dayrit had earlier suggested that gyms and sports facilities should be allowed to reopen when a specific area is placed under general community quarantine.
"As we prepare for a new normal, regular exercise should be included in a person's regimen to boost his immunity further alongside proper nutrition," Dayrit said in a statement.
Main image from Risen Wang/Unsplash