Blink Fitness, a budget-friendly gym chain owned by Equinox Group, has filed for Chapter 11 bankruptcy protection. This move comes in the wake of the COVID-19 pandemic, which has caused numerous fitness chains to seek bankruptcy, including New York Sports Club, 24 Hour Fitness, and Gold’s Gym. Despite this setback, Blink Fitness plans to continue operating its fitness centers during the sale process.
Equinox Group has been taking steps to improve its finances, including completing a $1.8 billion funding round in March. This funding was used in part to refinance the company’s $1.2 billion debt. Equinox, which is not publicly traded, has seen a 27% revenue increase in 2023 and has almost fully regained its pre-pandemic membership levels. The company also has plans to open more than two dozen new locations globally.
In addition to Blink Fitness, Equinox Group owns luxury fitness center Equinox, as well as brands like SoulCycle and Pure Yoga. Earlier this year, Equinox launched a $40,000 annual gym membership targeted at its most affluent member base in an effort to improve its finances.
According to a CNBC/Generation Lab Youth and Money Poll conducted in August, roughly one-third of Americans between the ages of 18 and 34 spend between $1 and $50 per month on exercise and fitness, while 47% report spending nothing at all. This data highlights the challenge faced by budget gyms like Blink Fitness, which offers membership options ranging from $17 to $39 per month depending on the location. Blink Fitness competes with other budget gym chains such as Planet Fitness, which raised the price of its base membership to $15 per month in June.
Unlike Blink Fitness, Planet Fitness has seen strong membership growth, with a 7% year-over-year increase in its second quarter, bringing its total membership to 19.7 million. Planet Fitness shares recently reached a 52-week high, indicating a positive outlook for the company.
Overall, while the fitness industry continues to face challenges due to the pandemic, there are opportunities for both budget and luxury gym chains to thrive. As more people prioritize their health and fitness, there is potential for growth in the industry. However, companies will need to adapt to changing consumer behavior and find innovative ways to attract and retain members.
