The gym world may not be so fit: Crunch files for Chapter 11

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Tough economic times have not skipped the fitness world: The Crunch chain of gyms has filed for Chapter 11 bankruptcy protection, but it looks like someone already has the net ready.

New Evolution Fitness Co. and some investing affiliates of Angelo, Gordon & Co., described as senior secured lenders, will acquire the company, with the sale to close in about two months. One of the founders of New Evolution is Mark Mastrov, who founded the 24-Hour Fitness chain.

In a statement, Crunch Chief Executive Tim Miller said, ‘This process of reorganization, along with the ongoing involvement of NEFC, will allow Crunch to emerge as a strong player focused on what we have become famous for: being the place where entertainment meets fitness. This transaction will allow us to restructure our balance sheet and close several unprofitable locations. Mark Mastrov and Jim Rowley strongly believe in Crunch and I am confident their industry expertise, vision and leadership will prove to be invaluable as we execute our business plan going forward.’ Rowley is New Evolution’s other founder. Crunch, known for its innovative fitness classes, has several gyms in San Francisco and New York, but only one in Los Angeles. While no Crunch executives agreed to speak with us, a news release said two Manhattan clubs will close, but it will be business as usual for L.A. The release also states, ‘The company said it has secured sufficient capital to fund operations through its reorganization.’

Although some gyms around the country report that membership has been up or at least steady through the recession, obviously not everyone is having an easy time of it. Many clubs are offering discounts on memberships or other specials to entice new members, and Bally Total Fitness filed for bankruptcy protection last year.

--Jeannine Stein