Popular At-Home Fitness Brand Declares Chapter 11 Bankruptcy
At-home fitness companies surged in popularity during the COVID-19 pandemic, when social distancing rules and gym closures made in-home workouts the go-to option. Peloton was the biggest winner of this trend, as its connected fitness devices became a status symbol and provided a form of virtual socialization when real-world gatherings were restricted.
However, as lockdowns ended and people returned to gyms, the demand for expensive at-home exercise equipment plummeted. Many connected fitness companies, including Peloton, experienced record sales during the pandemic, but post-COVID demand dropped sharply. Exercise machines costing more than $1,000 were justified when other recreational spending was restricted, but once gyms reopened, many consumers turned back to affordable gym memberships and in-person classes.
While Peloton may be the most well-known brand facing challenges, it’s not alone. Another pioneer in the home fitness space has hit a major financial roadblock. American Home Fitness, a regional brand founded in 2001, has filed for Chapter 11 bankruptcy.
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A Regional Fitness Leader Faces Hardship
Though Peloton may have dominated headlines, American Home Fitness was an early player in the at-home fitness market. The Detroit-based company has operated since 2001, providing a wide variety of exercise equipment, including traditional weights and connected fitness devices. Known for its personal approach, American Home Fitness emphasizes building relationships with customers and helping them find equipment that fits their fitness goals.
The company’s website highlights its commitment to customer service: “We truly want to match you with the fitness equipment that you will use week after week because you genuinely enjoy using it, and it makes you feel good.”
However, like many businesses that thrived during the pandemic, American Home Fitness faced a steep decline as post-COVID foot traffic and demand for at-home exercise equipment fell. The company was hit hard by the shift back to gym workouts, and despite its long-standing presence in the industry, it found itself burdened by leases for brick-and-mortar stores that were no longer performing well.
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Chapter 11 Bankruptcy for Reorganization
On April 2, American Home Fitness filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court, citing assets between $1 million and $10 million, with liabilities ranging from $100,000 to $500,000. According to the company’s legal representative, Charles Bullock, the business had performed exceptionally well during the pandemic but saw a significant downturn in demand afterward.
“This company was performing really well,” Bullock told Crain’s. “In fact, during COVID, it had very strong years. Post-COVID, there’s been a real decline in at-home exercise. Foot traffic is down significantly at their stores, and they still have leases that they have to pay on.”
The Chapter 11 filing allows American Home Fitness to reorganize its finances, address its leases, and better align with current market demands. The company plans to continue operating through the reorganization process and emerge as a more efficient business. American Home Fitness also plans to honor $12,500 in outstanding gift cards, ensuring customers are not left empty-handed.
In the filing, the company expressed confidence in its ability to recover: “The debtor filed this bankruptcy to reorganize its financial affairs to better meet market demand in the current retail environment. The debtor is confident in its ability to emerge from its reorganization as a stronger, more efficient operation.”
While the future remains uncertain for many at-home fitness brands, American Home Fitness is hopeful that this restructuring will allow it to continue serving its loyal customers while adapting to the new landscape of the fitness industry.
