Bally Total Fitness of Greater New York and its affiliates, including Bally Total Fitness Holding Corp., filed Chapter 11 Bankruptcy Dec. 3, 2008. Bally reported $480 million in revenues for its first three quarters of 2008. Primary debtors include U.S. Bank, HSBC, Leo Burnett.
According to its website, Bally operates approximately 400 clubs across the U.S. (other sources say 347 clubs), has the largest membership of its competitors, and has 23,500 on-site staff members, 6,700 group exercise instructors and 3,500 personal trainers. Other sources list membership numbers in excess of 3 million.
This isn't the first time in bankruptcy for Bally. It last emerged from bankruptcy in October 2007 following a July 2007 filing set off by defaulting on part of its $800 million in debt. The company was delisted from the New York Stock Exchange shortly after, as its share price fell below the minimum required and it failed to file its 2006 annual report. Harbinger Capital Partners brought Bally's out of bankruptcy with a $233.6 million private equity deal.
This time, Bally reportedly has $811 million in debt, $70.8 million in cash and short-term holdings and $411 million in assets. It cited the burden of its long-term indebtedness and constrained credit markets preventing refinancing options as primary reasons causing it to file.
The bankruptcy court has issued Bally approval to continue operating the company as normal until another hearing on Dec. 9.
The New York Times said that Bally is currently in discussions with its first-lien bank group to arrange debtor-in-possession financing in connection with a sale of the company.
According to CoStar Tenant, the typical Bally Total Fitness center is 26,000 square feet and a freestanding building.
This story appears in CoStar's Retail News Roundup: Dec. 7 to Dec. 13, 2008, a weekly column covering retail store expansions, closings, bankruptcies, acquisitions/mergers/sales, new retail developments, personnel changes, sustainability, and more.
This week in the Retail Roundup, CoStar reports on expansions or new concepts at The Human Bean and Giant Eagle; new retail developments in OH and MO; acquisition, merger, loan or sale activity at Boscov's and CNL Lifestyle Properties; closings, cutbacks or bankruptcies at B. Moss, Bally Total Fitness, iFloor, and the nation's oldest shopping mall; personnel announcements at KPMG Corporate Finance, Tanger Factory Outlet Centers, Acadia, Kite, and Wilson Commercial Real Estate; sustainability at Wal-Mart, and more.