Fitness studios and gyms across the United States are trying to navigate the loss of business due to the COVID-19 pandemic.
A fitness club in the northeast is being sued for failing to suspend memberships while the gym is closed as a social-distancing precaution. According to The Washington Times, Mary Namorato filed a 23-page class-action lawsuit against New York Sports Clubs last week, saying that the club has breached its contract and is denying its 600,000-plus members the option to cancel their memberships.
New York Sports Clubs, which are owned by Town Sports International LLC and Town Sports International Holdings Inc., have been closed since March 16. Namorato, who lives in New York, said the club has ignored her attempts to contact them about her $70 a month membership.
In a complaint to the New York attorney general’s office, Namorato, who was last billed March 1, said she wants to save money and explore fitness options. She received a response that “New York Sports Club is not automatically freezing or canceling memberships, is only permitting members to freeze or cancel their membership by mail, and freezes and cancellations are subject to certain fees.”
Town Sports is in financial trouble, according to Financial Times. A rescue refinancing deal for Town Sports is reportedly in jeopardy amid the coronavirus uncertainty. A $25 million takeover and $50 million loan financing between Town Sports and investment group Kennedy Lewis has been delayed.
The deal included Town Sports acquiring Flywheel Sports, a spin studio owned by Kennedy Lewis. Town Sports reportedly must refinance a $178 million loan before it can complete the Kennedy Lewis deal. Financial Times reports that the coronavirus has caused Town Sports to lay off staff and close a majority of its 186 clubs across the northeast.
