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Gyms really need COVID-19 relief money from the government: fitness CEO

Attention lawmakers: The battered gym industry — who has been left out of stimulus measures thus far — could also use a few bucks when you get around to passing a fresh round of COVID-19 fiscal relief.

That’s the rallying cry from Orangetheory Fitness co-founder and CEO David Long, who oversees some 1,000 locations worldwide.

“I think we were fortunate in that most of our franchisees were able to partake in the PPP [loan] programs which helped for the short-term. That quickly ran out. We would like to see the government take a more active role,” Long explained on Yahoo Finance’s The First Trade. “Fitness and wellness is so essential for our world and the U.S. more than ever before. We have formed a fitness alliance of over 30 of the largest U.S. and global brands. You are going to see starting in September a real push to really bring that to the surface and make sure that the fitness industry is not forgotten.”

With gyms ordered to be shutdown months ago by state legislators in a bid to slow the spread of COVID-19, the 40,000 fitness locations in the U.S. have been hammered. Mom and pop gyms may never reopen. National chain 24-Hour Fitness went bankrupt in June. Once fast-growing boutique gyms such as Orangetheory have had to raise money to keep the business afloat and curtail growth plans. Even well-capitalized gyms like Planet Fitness has had to slow down its torrid pace of expansion and pivot more to digitally-delivered workouts.

Yet, the fitness industry — in many cases run by franchisees that could be looked upon as small business owners — received no direct stimulus under the CARES Act. In a July 20 note to Senate Majority Leader Mitch McConnell, International Health, Racquet and Sportsclub Association (IHRSA) CEO Joe Moore estimated the industry had lost $7 billion in sales through July 1. The IHRSA said about 25% of the industry’s gyms will close by the end of the year, triggering “mass layoffs.”

Moore implored McConnell to pass direct financial assistance, sign off on modifications to the PPP to allow mid-sized fitness chains to participate and tax incentives for people to pursue spending on health and fitness.

No action has been taken by lawmakers, reflecting the general stalemate in passing the next round of COVID-19 stimulus.

People take an outdoor class at Pylo Fitness, with workout equipment set up on the sidewalk on La Brea Blvd, on August 7 2020, in Los Angeles, California, amid the novel coronavirus pandemic. - California on July 13 drastically rolled back its reopening plans and ordered all indoor restaurants, bars and cinemas to close again. Churches, gyms, shopping malls, hair salons and non-essential offices have had to shut indoor operations in half of state's worst-hit and most densely populated counties, including Los Angeles. (Photo by VALERIE MACON / AFP) (Photo by VALERIE MACON/AFP via Getty Images)

While gyms across the country have slowly started to reopen amid restrictions being lifted, the overall mood in the industry is that it will take time for the space to recover. In fact, it may never fully recover from the pandemic as people have built out their own home gyms and opt into app-based workouts.

Says Long, “We believe there will be some artifacts. We believe our members still get their best results and motivation by coming into a studio. We think that they’re going to mix that with some digital. We have even stood up our outdoor workouts at 300 locations. Our members surprisingly are actually enjoying the outdoor flavor of Orangetheory. We think it’s going to be a combination of all of those products that are going to meet the members wherever they are at.”

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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