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Competitive markets force gym chain into bankruptcy

When businesses in Hillsborough County choose to seek bankruptcy protection, many may assume that it is to escape from creditors. While this may be the case in many situations, other companies may find that different challenges are forcing them into considering this form of debt relief. Sometimes, there may simply not be a market for their products or services. They may also find their local markets saturated with what they have to offer. In each case, a company may not have accrued inordinate liabilities, yet they simply cannot rely on steady revenue to help them pay the debts that they do owe.

Such appears to be the case with a string of gyms and workout clubs whose parent entity recently filed for Chapter 7 bankruptcy in New York. While the company listed its liabilities to only be in a range of $0 to $50,000, it cited increased competition as being the reason why it decided to close its doors. Members have been informed that arrangements on how they can retrieve their personal items from the facilities as well as how to seek refunds will be forthcoming. All told, five locations across the country have ceased operations. The gyms themselves were actually part of an upscale franchise, of which locations in Los Angeles, Las Vegas and Hawaii remain in operation under a different ownership group.

The gyms still in business today cited less competition in their markets for their particular services as the reason for their continued success. This may serve to further illustrate the point that some companies, despite a lack of debt, can still suffer financially due to market factors. If and when such factors call the future of a company into question, its owners may be wise to seek the advice of a bankruptcy attorney.

Source: Chicago Tribune “’Upscale’ David Barton Gym closes in River North, files for bankruptcy” Yerak, Becky, Dec. 27, 2016

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