Now that many consumers have to make appointments to go to the gym or use a specific piece of equipment amid the pandemic, will they want to visit fitness clubs again?
Gyms are already experiencing a rocky reopening, with reports of potential coronavirus infections at a West Virginia Planet Fitness location emerging earlier this week. The chain, like other businesses, had been aiming to reopen after months of required lockdowns.
McCall Gosselin, a Planet Fitness representative, said per a Bloomberg report on Monday (June 29) that the building would temporarily shutter “out of an abundance of caution” and would deep-clean the facility prior to opening again.
As it stands, consumers are still hunkering down in their residences to stay safe amid the COVID-19 health crisis. Those who love to work out must then avoid gyms and fitness facilities, hurting companies that typically depend on membership subscriptions, retail sales and training revenues.
Ryon Packer, chief product officer at fitness industry-focused payment and club membership management software provider ABC Financial, told PYMNTS in a recent interview, “For many [clients], their point-of-sale transactions have just gone to zero.” Packer continued, “The industry is just shut down, [and more than 95 percent of it] is literally closed and has stopped billing.”
While gyms may feel the strain of sudden declines in revenue, they might be able to create new business strengths with innovative approaches and help from payment partners. Remote or in-home workout content streaming is not a novel concept for those that run clubs, for instance, but closures have sped up the adoption of these solutions.
But some large fitness chains are seeking bankruptcy protection. Gold’s Gym International Inc., in one case, filed for Chapter 11 in early May, citing financial interruptions caused by the coronavirus health crisis. At the time, it was noted that the Texas company would close 32 corporate-owned facilities for good and reorganize its balance sheet.
Another chain, 24 Hour Fitness, announced in mid-June that it had filed for Chapter 11 as well. The company, based in California, said in an online statement to its customers that it would shutter over 100 locations and that it was “implementing a financial restructuring.”
But even as the pandemic has created financial difficulty for gyms, athleisure company Lululemon announced plans to purchase Mirror, the home-exercise technology company, for $500 million. Mirror, for its part, offers a device that is attached to the wall and streams fitness classes into a person’s residence in real time.
And the ongoing consumer lockdown led connected-bike company Peloton to register $524.6 million in Q1 sales, which marked a 66 percent year-over-year increase. The firm’s stock price has doubled over the last two months and hit a record intraday high of $60 per share last week.