Man I really miss hitting the gym now, especially with all this stress of everything going on in the world.
One of the most popular gyms, Gold’s Gym, filed for bankruptcy. What does that mean for all of the gym rats? What is bankruptcy? The truth is, it probably won’t impact customers much at all. Chapter 11 bankruptcy is “protection from creditors given to a company in financial difficulties for a limited period to allow it to reorganize.” Only 10% of the gyms are company owned and the rest are franchises. The franchises are not filing chapter 11.
In fact, the CEO issued a press release and said, “Choosing to close those clubs and going through this financial restructuring is going to ensure we come out a stronger company.” They closed clubs because of COVID-19, but took advantage of the opportunity to get a fresh start by renegotiating all their creditors by filing chapter 11.
What gyms (and any physical business) need to do is invest in digital businesses that compliment their business. Gold’s launched an app for free workouts and streaming content, but it won’t launch for a few months. This means native digital companies are raising billions, racking up, and stealing market share. Even equipment makers with digital content like Peloton are stealing Gold’s clients. Don’t be Blockbuster!
I think gyms are here to stay, but they will evolve. Just like the movie industry, restaurants and pharmacies, they have to find new revenue streams, diversify and avoid racking up debt. I know i can’t wait to get back into @atl_stackwith @trainingwithjay ! How do you think gyms will adapt to this new age?