Fitness industry veteran Doug Cash understands the challenge he faces as the new CEO of the 24-7 Fitness Clubs in Pennsylvania that recently emerged from bankruptcy.
Cash, the former chief operating officer at Tennis Corporation of America, Chicago, took over Tuesday for the clubs’ founder, John Brinson, who resigned as part of a resolution filed in U.S. bankruptcy court with NovaBank of Philadelphia, the clubs’ lead bank. Brinson will remain as owner and board chairman.
24-7 Fitness Clubs filed for Chapter 11 bankruptcy on March 5, according to The Morning Call of Lehigh Valley, PA. The club cited about $12 million in debt, including a mortgage of $8.6 million to Nova Bank, the newspaper reported. 24-7 Fitness Clubs emerged from bankruptcy last Thursday after a judge threw out the case.
Cash had served as a consultant for the clubs for the past 3 1/2 years. He runs his CashFlowTennis consultancy business out of Seymour, IN.
“I’m trying to help out the situation, more than anything,” Cash says. “The last thing I want to see is these clubs have to shut down. My goal is to save it so it can prosper over the years.”
The chain has three clubs in Bethlehem, Trexlertown and South Whitehall Township, PA. The company closed a club in Allentown about a year and a half ago, Cash says. One of the three clubs has indoor and outdoor tennis courts.
“They’re fair,” Cash says of the clubs’ condition. “They’re not where they should be, but they’re certainly not insoluble either.”
Cash says the clubs have 215 employees and 10,000 members. Average dues have dropped 20 percent to 25 percent, Cash says, to about $40 a month. Revenue has dropped about $2 million over the last four years, he adds, so one initiative will be to raise dues to increase the revenue-per-member ratio.
“The bank has been very cooperative,” Cash says. “They understand that this isn’t easy. Coming out of bankruptcy isn’t easy, but we’re going to give it a college try.”
Cash served for 32 years at Tennis Corporation of America before it split with Midtown Athletic Clubs under the TCA Holdings LLC umbrella in 2005. Steve Schwartz, CEO of Midtown, says Cash is the right man for his new role.
“Doug Cash understands the big picture, positioning issues, the detailed operational issues, how the numbers work and is very good with people,” Schwartz says. “He has high integrity, tackles tough situations head on and has seen it all. Doug is the best person I can think of for this kind of challenge.”