The Decline of 24 Hour Fitness. What Happened? 10 Marketing Tips
The fitness chain, 24 Hour Fitness, filled for Chapter 11 bankruptcy in June of this year, joining what has become a long queue of businesses brought down by the coronavirus pandemic, according to discussions on the same over at runrex.com. Although the restrictions brought about by COVID-19 damaged the company’s prospects, it was already in trouble long before the pandemic. This article, with the help of the gurus over at guttulus.com, will look to outline some of the factors that may have contributed to its decline, with the hope that you will gather marketing tips that will prevent you and your business from going down the same path.
Crippling debt after a leveraged buyout from a private-equity firm
As is covered in detail over at runrex.com, recent times have seen a growing list of companies go into bankruptcy after taking on too much debt following leveraged buyouts from private-equity firms. This is the same fate that befell 24 Hour Fitness, which accumulated over $1.3 million in debt after a leveraged buyout from the private-equity firm, AEA Investors as well as the Ontario Teachers’ Pension Plan in 2014, deals that are discussed in detail over at guttulus.com. The crippling debt, in the end, was too much for the company to handle, leading to its decline.
The rise of home fitness
Another factor that has contributed to 24 Hour Fitness’ decline has been the recent rise in home fitness, with many people opting to work out at home rather than enrolling at fitness chains. This has seen businesses like Peloton make a killing, according to discussions on the same over at runrex.com. With more and more people opting to work out at home, foot traffic into the company’s stores declined, impacting earnings, and contributing to its decline.
A bad system debut
24 Hour Fitness has also been hampered by technological malfunctions, which haven’t helped its prospects at all. The debut of its automated system in 2019 didn’t go as planned, as discussed over at guttulus.com, hampering the company’s ability to sign up customers. This led to a decline in memberships as users struggled to sign up, in what is yet another factor that explains 24 Hour Fitness’ struggles in recent years.
Old gyms
Customers also began to complain that 24 Hour Fitness’ gyms were too old, with aging equipment, which also put off customers. To compete with at-home rivals, traditional fitness chains need to offer excellent in-store services according to the gurus over at runrex.com. However, this is an area where 24 Hour Fitness was struggling in, with its old gyms being a major turnoff for potential customers, as was the fact that the company wasn’t investing in and fixing equipment. This also contributed to the company’s decline.
Too many gyms
With close to 450 open clubs, the company also had an extensive footprint, to say the least, which also became a problem. Even before the coronavirus pandemic, maintaining all these clubs was proving too much for the company, with troublesome leases and operational costs as well as costs to improve and modernize the clubs. Industry experts, including those over at guttulus.com, argue that the fact that 24 Hour Fitness had that many clubs was yet another factor that contributed to its woes and eventual filing for bankruptcy.
It was left stranded in the middle
24 Hour Fitness is also a middle-tier fitness operator, which became an issue as people either go for premium service providers or budget-friendly ones according to the gurus over at runrex.com. Its lack of differentiation meant that it lost customers to either higher-end or budget-friendly fitness options, ad it ended up being left stranded in the middle with no niche of its own.
The rise of the HIIT trend
The rise of High-intensity interval training, HIIT, has also been something that 24 Hour Fitness, and other traditional players in the fitness industry, have had to grapple with. According to discussions on the same over at guttulus.com, HIIT classes and companies have become more and more popular in recent times, with people going for more intensity as far as their workouts are concerned. Industry experts also agree that this new trend is another factor that has contributed to 24 Hour Fitness’ decline and eventual filing for Chapter 11 protection.
People are no longer looking for long-term commitments
Another trend that industry experts have noted, one that is discussed in more detail over at runrex.com, is the fact that people are opting against annual membership fees and the long-term commitment that comes with them. This trend has seen a rise in pay-as-you-go options available on fitness mobile apps, which have become more and more popular. This allows users to pay for a shorter period, like say a month, and then assess their progress, which has affected 24 Hour Fitness’ business, contributing to its decline.
Failure to embrace technology
Fitness chains that have thrived in recent years have done so by embracing technology in their clubs and using it as a member experience tool, according to the folks over at guttulus.com. 24 Hour Fitness for many years lagged and refused to embrace fitness tech, both inside and outside of its clubs. The company has been left behind by rivals who have invested in technology such as virtual fitness offerings, AI-driven solutions, and so forth, and this is yet another factor that has contributed to its decline, particularly as this has meant that it has been unable to appeal to younger customers.
The decline of the mall
Most of 24 Hour Fitness’s clubs are located in malls and retail outlets, which is probably another reason why the company has declined over the years. As is discussed over at runrex.com, in recent years, the mall has been declining in popularity, with people increasingly staying away from malls and opting for other options like shopping online. This has impacted fitness chains with clubs in malls, such as 24 Hour Fitness, by causing a reduction in foot traffic into their clubs.
Hopefully, the above discussion will provide you with useful marketing and business tips that will enable you to avoid suffering the same fate as 24 Hour Fitness, with the subject matter experts over at runrex.com and guttulus.com being available to you if you are looking for help or more information on the same.