The wave of bankruptcies threatens fitness centers

The corona crisis cannot be mastered equally well for all companies. The fitness industry in particular is suffering, because the sports centers have been closed again since mid-December. Now a wave of bankruptcies threatens. 

Precarious situation in the fitness centers

The industry is particularly hard hit by the closure in January and February. The reason is that a particularly large number of subscriptions are usually sold during this time and this sale has now completely ceased in 2021. The first bankruptcy filings have already been filed. Some apprentices lost their apprenticeship positions because the related company was insolvent. Many more are standing on the border and struggling to survive. So far, however, no exact numbers can be given, these will only come in the course of the next few weeks. At the moment, the industry association only knows from hearsay about the bankruptcies and that some companies can no longer pay their bills. It is currently assumed that the real wave of bankruptcies will kick in in a month or two.

No government support

The industry association complains that although generous aid payments had been promised, none of them had yet arrived. Right now, at the beginning of the year, the insurance bills are coming in. These in turn have to be paid as well as the usual fixed costs. Due to the already poor operating year 2020, hardly any savings were made, so that the insurance has to be paid for from the already tight budget. Many landlords currently do not or only little to accommodate the fitness centers. Corona loans from many sports centers had to spend around 70 percent on the rental payments, other fixed costs were not included. As a result, many got into debt or plunged further into debt. Curious: many properties belong to Swiss banks, which in turn grant loans to their tenants and yet do not accommodate them. There is hardly any money left for resources.

Hardly any liquidity available

The fitness centers have no chance of changing anything in the current situation. You cannot build up liquidity because you have completely lost the months in which you would make the strongest sales. Many subscriptions expire and will not be renewed because customers don't see the end of the situation either. Some showed their solidarity during the lockdown and did not reclaim their contributions or partially extended their subscription. But at some point the customer's patience runs out and they only see the unsafe situation. In the meantime, hardly any fitness studio expects that after the relaxation, the same number of customers rush into the fitness center and commit themselves for a longer period of time with a subscription. The risk is too great for most sports fans.

Online courses are also only an alternative to a limited extent, because many young, sport-loving people tend to rely on YouTube or other free offers for their daily workout. Others rely on personal care because they are in pain and need precise guidance. This simply cannot be given via video because no direct feedback is possible. Even if the fitness centers try a lot to keep customers engaged, in the long run they will probably be one of the big losers of the corona crisis. If the lockdown were to be extended beyond February, that would mean the end of significantly more companies.

Conclusion: The fitness industry is on the gums

For many fitness centers it is now all or nothing! If they are still not allowed to open after February, the last glimmer of hope has disappeared and there will be a much larger wave of bankruptcies than already. Many fitness businesses are already having to close because they no longer have any income, but the expenses for rent, insurance and other cost items remain high. Corona loans are not being paid out or only slowly, these are used to pay the most important costs immediately. What remains are indebted studios that can only proceed to file for bankruptcy.

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