BY Fraser Tennant
Largely as a result of the lingering effects of the coronavirus (COVID-19) pandemic, affordable gym chain Blink Fitness has filed for Chapter 11 bankruptcy protection in order to facilitate a sale process.
According to court filings, the pandemic forced Blink to shut its operations for nine months which incurred additional debt and deferred rent obligations, leaving the company approximately $280m in debt.
Despite this, the company has demonstrated continuous improvement in its financial performance over the past two years with revenue increasing by nearly 40 percent. In 2024, it expects to build on this momentum and deliver the best top and bottom line performance over the last five years.
Blink also remains committed to its recently announced strategic initiatives to reinvigorate its most popular gyms, elevate its member experience and deepen its community connections, with a continued focus on democratising fitness for all.
“Over the last several months, we have been focused on strengthening Blink’s financial foundation and positioning the business for long-term success,” said Guy Harkless, president and chief executive of Blink Fitness. “After evaluating our options, the board and management team determined that using the court-supervised process to optimise the company’s footprint and effectuate a sale of the business is the best path forward and will help ensure Blink remains the destination for all people seeking an inclusive, community-focused gym.”
In connection with the court-supervised process, Blink has received a commitment of $21m in new debtor-in-possession financing from its existing lenders. Once approved by the court, this new financing, combined with cash generated from the company’s ongoing operations, will support the business during the Chapter 11 process, including paying employee wages and benefits without interruption.
Known for its commitment to an all-inclusive environment, Blink operates in more than 100 locations across the US, including New York, New Jersey, Pennsylvania, California, Illinois, Massachusetts and Texas.
“We thank our entire corporate and gym team for their continued dedication to our members, as well as our vendors and partners for their ongoing support,” concluded Mr Harkless. “We look forward to emerging from this process as an even stronger business.”