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Peak Fitness to Close Several Clubs

RALEIGH, NC -- Peak Fitness, Charlotte, NC, will close several clubs in the Raleigh, NC, area in the coming weeks and has made an arrangement with Lifestyle Family Fitness to transfer members to its four area clubs.

Three of the Peak Fitness clubs—downtown Raleigh, North Raleigh and Cary—that were involved in the bankruptcy of Peak Capital Holdings LLC in April will close by July 1, Peak Fitness President Jeff Stec told reporters Monday. The fourth club involved in the bankruptcy, in Fuquay-Varina, will remain open, as will clubs in Durham and Chapel Hill, according to a company statement.

The downtown Raleigh club was issued a court-ordered eviction notice on Monday by the Wake County (NC) Sheriff’s office.

“Peak Fitness has made every effort to continue to service the health and fitness needs of our members by upgrading their memberships, allowing them to have the opportunity to use all remaining Peak Fitness locations in addition to using the most conveniently located health clubs in the area that provide excellent amenities and services,” Peak Fitness said in a statement. “Members of those facilities being closed will receive written notification providing information about their options moving forward.”

In addition to the four clubs it operates in Raleigh, Lifestyle Family Fitness, based in St. Petersburg, FL, has two other locations in Charlotte. The company has plans to add more clubs in both cities, says Geoff Dyer, founder of Lifestyle Family Fitness.

“We are fortunate that we were able to work quickly with the owner of Peak Fitness, Jeff Stec, to ensure that the members were not inconvenienced by the closing of these clubs and subsequent transfer of their membership to Lifestyle,” Dyer says. “Members can complete the transfer between now and the end of this month.”

Five local Gold’s Gyms, operated by Virginia-based Titan Fitness, will be accepting displaced Peak Fitness members through the end of the month, according to a published report. As part of the promotion, the Gold’s Gyms will match the rate of the Peak Fitness members’ contracts and waive enrollment fees.

These closings follow a series of transgressions for Peak Fitness. In addition to the bankruptcy filing, the company and North Carolina Attorney General Roy Cooper reached a settlement last month after Cooper filed a lawsuit against Peak Fitness for not having required bonds in place. North Carolina law requires clubs to purchase bonds that will reimburse members if the club closes and the company does not have the money to refund customers who paid in advance. Under the arrangement, Stec and Peak Fitness are not allowed to sell prepaid memberships.

In January, Peak Fitness settled a previous lawsuit with Cooper’s office, agreeing to improve its customer service, contract and billing practices.

Responding to questions about the Peak Fitness club closings, Cooper said, “We’ve been concerned about whether this company can make good on its obligations, which is why we have had to take action. We are following the latest developments closely, and consumers are encouraged to contact us for help.”

Stec says Peak Fitness did not make good business decisions regarding its clubs in the Triangle area (Raleigh, Durham and Chapel Hill). The company began in Charlotte in 2000 and entered the Triangle in 2006.

“In this market, we ended up purchasing a bunch of facilities that were struggling,” Stec told reporters. “So basically, we ended up inheriting a bunch of issues. Usually, we can build them from the ground up and make sure they are run right from the start. It just ended up making it very difficult to operate effectively.”
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