Covid-19 should act like the canary in the coal mine to individuals and especially to businesses who did not have a backup plan or cash reserves.
However, for some businesses the Coronavirus was too much to handle as many industries rely fully on freedom of movement, such as the heavily hit travel industry. We should take stock of this unprecedented moment in our lives, but also be reminded to appreciate what we have while we have it.
Here are a few well-known companies who have filed for bankruptcy during the current global pandemic.
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Gold’s Gym
In 1977 Arnold Schwarzenegger made an iconic documentary Pumping Iron, featuring this gym which has amassed more than 700 gyms around the world.
“This has been a complete and total disruption of every one of our business norms, so we needed to take quick, decisive actions to enable us to get back on track,” said the Chief Executive of Gold’s before ending on a defiant “we’re absolutely not going anywhere”.
With the USA being one of the hotbeds of the world for Covid-19, it remains to be seen what will happen to this influential gym chain.
GNC
Another heavy-hitter in the fitness world has almost fallen to Covid. The vitamin and nutrition chain has filed for chapter 11 bankruptcy and already closed a quarter of its worldwide stores.
The chain that was founded in Pittsburgh in 1935 has reported a dramatic loss of multiple billions of dollars factoring in annual revenue, assets and liabilities. Some experts however claim that GNC were already on a downward spiral as fitness enthusiasts opted for cheaper stores such as Walmart and Costco for their supplements.
California Pizza Kitchen
Pizza sales have boomed during the pandemic but one pizza company that isn’t doing so well is the 35-year-old chain California Pizza.
According to CNN business, the company hasn’t paid rent for the past several months on a majority of its locations and is in debt to its landlords. The temporary closure of in dining has hurt them the most as clients opt for well known pizza delivery services such as giants like Pizza Hut.
24 Hour Fitness
The premise of being able to go to a gym 24 hours a day, any day of the week is a fantastic business model for people who work unsociable hours or for parents of newborns…it’s not so great though when the government forces to have you closed 24/7!
100 gyms have been closed due to the situation, but the company seem to remain positive and for good reason. The popular American gym chain was doing very well before Coronavirus closedown and have recently secured quarter of a billion investment, with a plan to reopen when the strict rules are lifted this year.
Conclusion
Bankruptcy doesn’t always mean the end and it isn’t all doom and gloom. Often it’s a smart business move by savvy people who understand the nature of this unprecedented time that is affecting economics and filing for bankruptcy is like playing a chess game, with a strategy for a long-term win.
If you want to see who is making the most out of Covid as a business, check out our article 4 Companies that are making MORE money due to Covid.
