24 Hour Fitness files for bankruptcy and closes over 130 gym locations across the US

• 24 Hour Fitness filed for bankruptcy on Monday morning after announcing that it would be closing over 130 locations across the US. A spokesperson declined to comment on how many jobs would be impacted by this.

• In a statement to the press, CEO Tony Ueber said that the company would not be filing for bankruptcy if it were not for the "devastating" effects of the coronavirus pandemic.

• However, its troubles predated the pandemic. The company was lumbered with a heavy debt load and had seen membership rates decline in recent quarters.

24 Hour Fitness has become the latest casualty of the coronavirus pandemic, filing for Chapter 11 bankruptcy early Monday morning.

The news comes just days after the fitness chain said it would be permanently closing more than 130 locations across the US. A spokesperson declined to comment on how many jobs would be impacted by this when contacted by Business Insider.

In a statement to the press, company CEO Tony Ueber called out the coronavirus pandemic as being the main reason for its recent bankruptcy.

"If it were not for COVID-19 and its devastating effects, we would not be filing for Chapter 11," he said. "With that said, we intend to use the process to strengthen the future of 24 Hour Fitness for our team and club members, as well as our stakeholders."

But its woes predated the pandemic. The company was lumbered with a heavy debt load, and at the end of 2019, its financial rating was downgraded by Moody's following "a sizable decline in membership count" and "an acceleration in comparable club revenue declines in the third quarter."

Through its Chapter 11 filing, 24 Hour Fitness said it has secured around $250 million in funding to enable it to reopen its remaining locations and resume business. It expects the majority of its remaining 300 or so locations to be open by the end of the month.

"The COVID-19 environment has proved that attention to health and fitness are more important now than ever before," Ueber said. "As a result of this restructuring, we will gain financial strength and flexibility to accelerate our business transformation plan, which includes reinvestment in our existing clubs, opening new clubs and introducing several new innovative products and services that will enhance the fitness experience for our club members and guests for many years to come."

24 Hour Fitness is among the gym chains in the US to have been hard hit by the pandemic, which has kept around 38,000 fitness gyms and studios nationwide closed over the past few months.

Other major chains such as Gold's Gym and YogaWorks have also announced permanent closings because of this.