Youfit files for bankruptcy as COVID-19 rages

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The pandemic’s toll on fitness centers is rising with another chain – Youfit Health Clubs LLC – filing for Chapter 11 bankruptcy protection.

The company, with 85 locations in 10 states, is based in Deerfield Beach and operates 61 clubs in Florida, including 40 in Miami-Dade, Broward and Palm Beach counties.

Youfit did not reveal if any sites will close, but with COVID-19 cases once again fly away in Florida and across the country, Youfit is one of many fitness chains trying to stay afloat until a vaccine arrives.

Others have filed for bankruptcy since the pandemic began, including Gold’s Gym International, YogaWorks, Cyc Fitness, Flywheel Sports and 24 Hour Fitness.

And a coalition of smaller chains, including two based in South Florida, this week called on Congress to ensure gyms are included in any new economic relief measures being considered.

Before filing in Delaware Bankruptcy Court on Monday, Youfit reached an agreement to sell itself to lenders for $75 million, Bloomberg reported. Lenders would assume ownership of the business in exchange for canceling its debt. The agreement is subject to court approval.

The company, founded in 2008 in St. Petersburg, reported assets between $50 million and $100 million and liabilities between $100 million and $500 million. Bank of America is listed as the company’s largest creditor with $10 million owed to it. Most of the other major creditors are owners.

Gyms in most parts of Florida were allowed to reopen in May at reduced capacity with strict requirements for wearing a mask and disinfection of machinery and equipment. Currently, masks are not required in most counties during exercise, except in Miami-Dade County. Still, many former clients have avoided their traditional gyms, fearing they might catch the virus through an infected member’s breath or sweat.

Customers at South Florida gyms have filed dozens of complaints alleging that gyms failed to follow safety protocols.

Meanwhile, users fearful of returning to public gyms have sued their ahome workout routines, which boosted sales of home workout equipment like spinning machines, bikes, treadmills and weight sets. Exercise equipment maker Nautilus Inc. reported in August that quarterly sales rose 94% in the second quarter of the year, while high-tech fitness equipment maker Peloton recently announced an increase in sales of 172% and its first ever quarterly profit.

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In South Florida, Youfit operates gyms in Boca Raton, Boynton Beach, Coconut Grove, Coral Springs, Dania Beach, Davie, Deerfield Beach, Greenacres, Hialeah, Hollywood, Lantana, Lauderdale Lakes, Margate, Miami, Miami Gardens, North Lauderdale, Oakland Park, Pembroke Pines, Pompano Beach and Sunrise.

Youfit made a name for itself by marketing a no-frills discounted subscription similar to rival Planet Fitness. Memberships cost $10 per month per person, plus an annual fee of $39.99.

The bankruptcy filing will allow the channel to remain in business, spokesman Evan Nierman said in a statement released by the company.

“As with many industries, including other health clubs, the pandemic has hit Youfit hard, and we have made the decision to restructure the business through a bankruptcy filing in order to continue operating and ‘providing an uplifting fitness experience for our loyal members,’ the statement read. ‘Over the past few months, our clubs have reopened across the country with strict new safety protocols, and it’s been truly inspiring to see our members again in the clubs.”

Other members of the health club industry do not share Nierman’s upbeat assessment.

The Community Gyms Coalition, representing so-called boutique fitness centers, released a statement this week calling on Congress to include the fitness industry in any post-election relief legislation it considers. The coalition cited an analysis by the International Health, Racquet & Sportsclub Association which found that a quarter of all fitness facilities – around 10,000 gyms – could close by the end of the year without relief.

Companies identified as “allied” behind the relief spending appeal include Boca Raton-based Orangetheory Fitness and Hallandale Beach-headquartered Zumba Fitness.

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