On Sept. 14, Flywheel Sports Inc. closed its 42 studios, laid off its 1,200 employees and filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in New York.
Flywheel had $10 million to $50 million in liabilities and less than $50,000 in assets, according to its Chapter 7 filings.
Chapter 7 bankruptcy is a liquidation of a company unlike Chapter 11, which is a reorganization of a company. Gold’s Gym International, 24 Hour Fitness and Town Sports International have all filed for Chapter 11 reorganization since the COVID-19 pandemic with Gold’s Gym emerging in July with a new owner.
Founded in 2009, Flywheel grew to have 42 studios in California, Colorado, Florida, Georgia, Illinois, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Washington state, and Washington, DC. In August 2019, Flywheel closed 11 of its underperforming studios in multiple markets.
In 2017 Flywheel began marketing at-home bikes to consumers after at-home cycling brand Peloton proved its staying power. Peloton filed an infringement lawsuit against Flywheel claiming that Flywheel had used proprietary Peloton technology to stream classes and track performance on its FLY Anywhere bike. The companies settled the lawsuit with Flywheel acknowledging its use of Peloton’s technology.
KLIM purchased a majority stake in Flywheel in April 2019 and began seeking a buyer for the company as it experienced financial difficulties, according to Bloomberg. In January, Town Sports International announced plans to buy Flywheel in a deal that was created to stem some of Town Sports’ own financials woes, but that deal fell through in April.