Fitness centers struggled amid forced closures from the coronavirus pandemic. LA Fitness and In-Shape Health Clubs both explored some ways to cope and to weather the health crisis, according to Bloomberg. It also comes as the two companies also need to deal with debts after several months of shutdowns.
Struggling Fitness Centers
The California-based fitness chain In-Shape Health Clubs looks for ways to counter the aftermath of the pandemic towards fitness centers. In a Bloomberg report, sources said that the company considers debt structuring, raising a capital, or even a potential sale.
After laying off the majority of its employees, California fitness chain In-Shape is exploring strategic options including a debt restructuring https://t.co/HkYsMWyJI6
— Bloomberg (@business) October 1, 2020
On the other hand, LA Fitness international could also include a capital raise as it attempts to weather the pandemic. In another article, sources said that the company plans to reach a deal with lenders to ease its debt that amounted to about $1.7 billion.
In September, a group of fitness centers, including In-Shape, filed a legal action as they want indoor fitness centers to operate. In-Shape CEO Francesca Schuler said that the company has “created strict gudielines to ensure public safety when exercising indoors.”
In-Shape’s Next Steps
Previously, In-Shape had also axed jobs amidst closures of its businesses. After the shutdown of its over 60 locations, Bloomberg reports, the private equity-owned fitness firm hired an adviser to explore its next steps, which include a possibility of selling, sources say.
Bloomberg reports that In-Shape’s debt amounted to $70 million. Moreover, the publication said that the debt is split across a $17 million revolving credit facility and a $53 million term loan.
Meanwhile, both In-Shape and its parent company, Pulse Equity Partners, refused to give a comment. However, the publication said that In-Shape’s other owner, Fremont Private Holdings, did not immediately respond for a comment.
LA Fitness’ Emergence From the Pandemic
According to Robert Wilson, LA Fitness’s general counsel, the company talked with lenders and their representative, PJT Partners. Wilson noted that they will address “the company’s successful emergence from the [COVID-19] closures.”
While In-Shape sought the assistance of an adviser, LA Fitness did not. Should the communications with the landers became unfruitful, Wilson noted that they have not considered filing for bankruptcy protection.