YouFit Health Clubs LLC, a fitness chain with roots in St. Petersburg, filed for Chapter 11 bankruptcy protection Monday.
The bankruptcy could increase vacancy rates at retail spaces throughout the area. As part of the filing, the company is asking a federal bankruptcy judge in Delaware to allow it to reject 62 unexpired leases, including for six health clubs in the Tampa-St. Petersburg area, as well as a business office in downtown St. Petersburg.
YouFit is the most recent fitness company to seek to reorganize their finances as a result of the Covid-19 pandemic, which caused consumers to stay away from gyms for several months this year, Bloomberg reported.
YouFit, which is headquartered in Deerfield Beach, Florida, opened its first location in St. Petersburg in 2008. Before the pandemic, the company operated more than 100 fitness clubs in 12 states and employed more than 1,200 employees. It had $135 million in revenue in 2019.
Since the onset of Covid-19, YouFit has reduced its footprint to 10 states, 85 clubs and about 1,600 employees. It currently has about 340,000 members. YouFit was forced to suspend or close operations at its clubs due to the pandemic, a court filing said.
While 84 of the 85 remaining clubs have resumed in-person operations, the company had a dramatic decrease in revenue resulting in an acute liquidity crunch, the filing said.
“As it did for many industries, including other health clubs, the pandemic hit Youfit hard, and we have made the decision to restructure the company through a bankruptcy filing as a way to continue operating and providing an uplifting fitness experience to our loyal members,” Evan Nierman, a spokesperson for YouFit, said in a statement. “Over the last few months, our clubs have reopened across the country with new stringent safety protocols, and it has been truly inspiring to see our members back in the clubs. As we enter this new phase — designed to position Youfit for future success — we remain committed to helping our members live healthy, fit lives.”
The company has a tentative deal to sell itself for $75 million to its lenders. Bank of America, which gave YouFit a $10 million Paycheck Protection Program loan, is the company’s largest creditor, according to the court filing.
Among the other largest creditors listed in the filing are Jem Investments Ltd. in Tampa, which is owed about $196,000 in rent, and Lafayette Place LLC in Tampa, owed about $166,000 in rent.
As part of the case, the company is asking a federal bankruptcy judge in Delaware to allow it to reject the lease for a property at 111 2nd Ave. NE in Plaza Tower in downtown St. Petersburg. It also wants to reject 62 unexpired leases for its health clubs, including six clubs in the Tampa-St. Petersburg area:
• YouFit Six LLC, 1685 Gulf to Bay Blvd., Clearwater
• YouFit Four LLC, 4465 W. Gandy Blvd., Tampa
• YF Horizon LLC, 3916-A W. Hillsborough Ave., Tampa
• YF East Fowler LLC, Shopper’s Square Shopping Center, 1104 E. Fowler Ave. #B, Tampa
• YF West Brandon LLC, Plaza at Brandon Town Center, 322 Brandon Town Center, Brandon
• YF New Port Richey LLC, Southgate Shopping Center, 5231 US Highway 19, New Port Richey
“The Debtors have determined there is no meaningful net benefit likely to be realized from efforts to market the Leases for potential assignment or sublease, and that there is little, if any, likelihood that the Debtors will be able to realize value from the Leases,” the court filing said.
The company also is asking the judge to allow it to abandon all the personal property left at those sites.