2 Major Gyms Declared Bankruptcy: How Others Plan to Survive

The coronavirus pandemic has wreaked havoc on a number of industries, from hotels to restaurants

The coronavirus pandemic has wreaked havoc on a number of industries, from hotels to restaurants to retailers. But there’s another type of business getting slaughtered by the pandemic: gyms.

Earlier this year, many gyms were forced to shut down as the pandemic grew worse. Some gyms have since been allowed to reopen but with numerous operating restrictions — namely, sticking to 25% capacity and mandating masks must be worn at all times.

It’s a setup that doesn’t work for everyone. Many gym enthusiasts have limited time in their schedule to exercise, given the constraints of the workday, so popular time slots will likely get booked up fast. And while there’s been resistance to mask-wearing on a national level, many gym-goers insist intense workouts and masks just don’t mesh.

The result? The appeal of the gym has waned, and between canceled memberships and forced closures, gyms are in serious trouble. In fact, just recently, both Cyc Fitness, a popular cycling studio chain, and Yogaworks (OTCMKTS: YOGAQ), an indoor yoga chain based out of California, filed for bankruptcy due to the impact of the pandemic. YogaWorks has also announced it’s closing all 55 of its locations nationwide.

All of this is bad news, not just for gym owners but for the commercial landlords who rely on gyms as tenants. If gyms continue to close, landlords will have a host of vacancies on their hands — and far too few replacement tenants to look to.

Can gyms save themselves?

With coronavirus cases surging throughout the country, it’s clear that going to the gym has become precarious. And while many gyms are currently allowed to remain open, many more could also be forced to close, especially if holiday travel fuels the spread of the outbreak even more.

But that doesn’t mean there’s no hope for gyms. Rather, those that can get creative could generate just enough revenue to make it through the pandemic and open their doors fully on the other side of it. For one thing, gyms located in warmer climates can offer outdoor classes year-round. It’s a safer alternative to cramming people who are breathing heavily indoors, and capacity limits won’t apply the same way.

Online classes are another option to consider — a model many gyms have already adopted. And then there’s the concept of the workout pod: small groups that work out together without having to distance but are kept apart from other pods.

That said, creativity can only go so far, and one thing gyms don’t want to do is cross the line into breaking the law. One gym in Poland, for example, decided to rebrand itself as a church to avoid operating restrictions. That’s a tactic unlikely to work in the U.S., though some gyms may be desperate enough to try it.

Gyms need to hang in there

The good news for gyms is that once the pandemic is over, there’s likely to be an uptick in demand — partly because people will be eager to work out in a group setting after having been limited to online workouts in their living rooms, and partly because many people are putting on weight while stuck at home. If gyms can hang on long enough to open their doors once COVID-19 is less of a threat, those left standing could wind up doing very well for themselves. It’s just a matter of surviving the next number of months to get there.

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