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Planet Fitness Sells $800M in Asset-Backed Bonds

Planet Fitness Sells $800M in Asset-Backed Bonds

The proceeds will be used partly to pay down debt; Planet’s new CEO takes the helm next week amid a challenging time for the popular low-price gym giant

Planet Fitness has sold $800 million of bonds, the proceeds of which will repay debt stemming from 2018 that has a principal balance of approximately $591 million, transaction costs and general corporate purposes, which may include fund share repurchases. 

Guggenheim Securities, LLC is listed as a representative of the transaction, according to an SEC filing

It’s the fourth time Planet Fitness has used whole business securitization, according to Bloomberg. In 2022, Planet Fitness sold $975 million of asset-backed bonds, in part to fund its acquisition of Sunshine Fitness. Self Esteem Brands, the parent company of Anytime Fitness, The Bar Method and now Orangetheory Fitness, participated in its first securitization in 2021.

Planet Fitness’ new CEO Colleen Keating officially takes her post on June 10, replacing interim CEO Craig Benson. 

The big box gym giant reported lukewarm new member growth for Q1 and lowered its outlook for the full year due partly to reduced consumer spending. Beginning this summer, Planet Fitness will increase its basic membership to $15 a month, a $5 increase from its longstanding $10/month pricing. The adjustment will be put into effect for new Planet Fitness members while current Classic Card holders will continue to pay $10 a month in a “price for life” strategy. 

As for its growth plans, the “Judgement Free Zone” gym has plans to open 300 locations in Spain, with the first location opening in Q3. Planet Fitness intends to look at other European markets following Spain.

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Shares of PLNT are up 9.51% in the past month, demonstrating that the fitness brand is moving past March’s controversy regarding its transgender bathroom policy. Benson noted the widely reported incident on Planet’s earnings call last month, sharing that the fitness brand experienced significant cancellations, which have remained elevated. However, he indicated that new member numbers have since rebounded.

Planet Fitness is again running its popular High School Summer Pass program, which invites high school teens ages 14-19 to work out for free at any of its 2,500 locations in the U.S. and Canada. Now in its fourth year, the program runs through August 31 and has been pivotal in the big box gym’s strategy to appeal to young fitness consumers, especially Gen Z, and create brand loyalty. 

Much like the U.S. is experiencing, high-value, low-price, (HVLP) gyms are also thriving in the U.K., according to a new report.

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