YogaWorks, one of the largest yoga chains in the world, with more than 60 studios across the country, filed for bankruptcy on Tuesday, according to a press release. The Chapter 11 petition ordered the permanent closure of all remaining YogaWorks brick-and-mortar studios in the United States as a result of the financial burden of the ongoing coronavirus pandemic, according to the release.
“The COVID-19 pandemic has created unprecedented challenges for our industry and business, including mandatory studio closures and social distancing-imposed attendance restrictions even where studios have been permitted to reopen,” YogaWorks CEO Brian Cooper said in a statement. The company will continue its business operations exclusively through its digital platforms, offering livestream and on-demand education and instruction, which includes more than 40 YogaWorks Live classes daily and more than 1,000 hours of pre-recorded sessions and workshops, as well as virtual teacher trainings. YogaWorks’ digital operations have turned a profit and continue to display growth, according to the statement.
YogaWorks and Financial Hardship
YogaWorks, owned by a private equity firm, delisted from NASDAQ in mid July 2019, after its shares no longer met the minimum bid price of $1.00. Its initial public offering was in 2017. In bankruptcy, Serene Investment Management has temporarily acquired YogaWorks’ digital and education business and will set the floor for the auction. The final sale of the company will be awarded to the highest bidder or best offer—and subject to approval by the U.S. Bankruptcy Court for the District of Delaware. Serene has offered debtor-in-possession (DIP) financing to support YogaWorks’ continued operations and will ensure that all remaining staff continued to be compensated during the transition. Teachers who were furloughed because of the pandemic will be permanently laid off, explained Cooper.
YogaWorks’ East Coast market was the first to face financial hardship in recent months, when Cooper delivered the news in April that all four remaining New York locations would permanently close. By September, news that all YogaWorks studios across the U.S. could close permanently had begun to circulate. An internal email that went out to teachers at YogaWorks and Yoga Tree (a group of YW partner studios in the San Francisco Bay Area) that was obtained by Yoga Journal indicated that these closures would take effect for the “foreseeable future” beginning September 11 until social-distancing restrictions were lifted.
For the past several months, YogaWorks had taken measures to adapt to the challenges presented by the pandemic. In addition to launching a massive, well-oiled digital platform, the company formed an Anti-Racism, Diversity, Equity and Inclusion Council to reevaluate policies and practices. It also established a “COVID task force” with procedures for the safe reopening of studios, when that was still an option.
But as Cooper put it, the pandemic “brought the yoga industry to its knees.” “What we formerly considered competitors are now brothers and sisters in arms just trying to survive,” he wrote. He said that the company had initially expected to recover, and that making the pivot to digital would keep operations afloat until studios could reopen. Cooper said that with studios functioning at just 10 to 20 percent capacity, the company would be unable to keep its studio doors open. “While we understand and agree with the need for social distancing, mask requirements, and other procedures to operate, we have found unequivocally that it is not economically sustainable to continue to operate an in-studio business in a COVID world,” he wrote.
YogaWorks, founded by teachers Maty Ezraty, Chuck Miller, and Alan Finger, was established in 1987 in Santa Monica, California, before expanding across the country. The YogaWorks method combined different styles of yoga, including Iyengar and Ashtanga, helping to create the popular vinyasa yoga trend and the careers of many of the yoga teachers students seek out today, including Kathryn Budig, Annie Carpenter, and Seane Corn.
Sandra Sanchez, who taught at YogaWorks for four years at the Larchmont and Pasadena, California, locations, was furloughed in March at the start of the pandemic and recently laid off when the company declared bankruptcy. “Learning that YogaWorks studios were permanently closing was devastating news for all of us,” said Sanchez. “Many of the studios, like Center for Yoga in Larchmont, had been there for decades and were anchors in the yoga community. Many of us not only taught, but also practiced and trained to be teachers, there. It’s the end of an era, and although the yoga community continues virtually, it’s just not the same,” she said.