Fitness clubs rocked by Covid-19 closures face a swell of bankruptcies with more than $10 billion of revenue wiped out as clients ditch memberships, according to investment bankHarrison Co.
In a Harrison survey of 1,000 fitness club users, more than a third said they have canceled or plan to terminate existing memberships.
“There are 38,000 locations throughout the U.S., and about a third have a reasonably high probability of being shut down,” Paul Byrne, an investment banker at Harrison who was formerly president at elliptical-maker Precor, said in a Bloomberg Television interview. A large number are “probably not going to make it through this.”
Gyms already loaded with debt are facing long-term declines in revenue despite social-distancing measures to fight the spread of the coronavirus beginning to ease across the U.S. People are likely to continue shunning closely-packed fitness centers to avoid being in close proximity to other individuals even as the economy reopens, according to the report.
19,056 in U.S.Most new cases today
-13% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23
-1.044 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23
-4.8% Global GDP Tracker (annualized), April