California’s COVID-19 pandemic rules are forcing In-Shape Health Clubs to file for bankruptcy.
The Chapter 11 filing was made on Dec. 16 with the goal of keeping 45 to 50 clubs. The fate of the In-Shape club in Ceres remains unclear as the company did not disclose which 45 clubs will remain open.
The Ceres club on Mitchell Road has been closed due to Gov. Newsom’s mandates, which are among the most stringent in the nation.
In-Shape CEO Francesca Schuler said the company is not going out of business and is committed to the Valley.
“We have closed some clubs we aren’t going to be able to reopen, but the same group of clubs just is going to take a while to build back,” she said. “But we are 100 percent going to be in business and operating and looking to grow down the road.”
In-Shape issued a release last week noting that “While thousands of health clubs and gyms have been operating safely across the nation throughout much of the pandemic, California’s more restrictive COVID-19 policies have severely damaged the state’s fitness industry. Despite the shutdowns, In-Shape has developed technology and protocols to enhance the member experience, including new cleaning procedures, physical distancing guidelines and contactless member interaction. Together these enable the company to provide a safe environment in its clubs while also operating outdoor clubs where possible so that it can keep serving its valued members during this difficult time.”
Approximately 17 clubs including Manteca West and Lathrop will not reopen. In-Shape has also permanently closed two of their three Tracy locations as well as three Stockton locations.
The Manteca club on East Yosemite Avenue is one of the 16 In-Shape clubs that are now open for outdoor activities as are the Tracy Boulevard and Stockton West Lane locations.
The Stockton-based health club chain has 470,000 members. In February, In-Shape had 3,000 workers at its various locations and now has a workforce of about 600 as COVID-19 rules wiped out 80 percent of the jobs they provided the communities they are located.
Even though they have reopened 16 locations with outdoor activities they have limited access. Members are required to make a reservation 48 hours in advance and can have access to a club once a day for a maximum of two hours. Mandatory social distancing and other COVID-19 protocols are in place.
In-Shape Fitness joins other health club chains such as Gold’s Gyms and 24 Hour Fitness in the bankruptcy courts. 24 Hour Fitness has permanently closed 130 of their locations.
Former In-Shape CEO Paul Rothbard, who led the company for over 25 years, has formed Solutions Investment Group to purchase the business, subject to court approval. That effort is being backed by Aqualine Credit Opportunities.
“I am reinvesting in In-Shape because I believe in both the brand and the terrific team that has worked to deliver an exceptional member experience in the markets we serve,” said Rothbard. “In-Shape goes beyond fitness to create inclusive communities within the clubs as well as continuing to provide new innovations in fitness, which is why we see tremendous value and potential in the brand.”
In-Shape expects the filing process for Chapter 11 protection to finish in spring 2021.
In a letter to members, Schuler said because of the pandemic the majority of their gyms have been closed most of this year leading the chain to have to restructure its business model. The letter said members will not see their membership status change moving forward.
“However, the state’s extended shutdown of gyms has dramatically impacted our business, which is requiring us to develop a plan to restructure our business for the future. As part of this plan, we are filing for Chapter 11 relief so we can continue our day-to-day operations while we restructure the company to ensure our long-term viability. This plan will not affect your current membership status. You may receive legal communication related to the filing; this is a normal part of the process.”
If a member’s home club is closed, membership will be transferred to a nearby club. Members can opt out or make other changes to their membership status through the In-Shape app or https://memberhub.inshape.com/
Dennis Wyatt contributed to this article.