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The Pain of Closing a Club and How to Do It Properly

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Mike AlpertMike Alpert

As I look back on 2020, many things go through my head, and many emotions come to the surface. At the Claremont Club in Claremont, California, we had come off the best year in our 46-year history with strong membership growth; extremely low membership and staff attrition; no aged payables and record net income. Our 2020 budget was a somewhat aggressive one, and yet, through February, we were nicely ahead of our projections. None of us had any idea of what was coming.

In February, news began coming out about a rare, new virus strain that became known as COVID-19. Initially, I thought that this was the strain of flu that we got inoculated for by getting our annual flu shot. Like many, I had no idea that, by mid-March, States and local governments would shut down the country. By March 15th, that is exactly what happened.

Talking with our owners and Board members, we all thought that this was probably a precautionary measure, and that within a couple of weeks, we would be back in business and operational again. After all, the economy was booming; unemployment was at historically low levels and interest rates were at an all-time low in our lifetimes.

When April started and the lockdowns continued, we felt that, for certain, this would not last more than a couple of extra weeks and worst-case scenario, not past April 30th. However, as we now know, for us, the shutdown lasted well beyond that time. As of my writing this article, we are now well into the 10th month in California. Even with clubs allowed to reopen elsewhere in the country, the severe restrictions make it very challenging for continued financial survival. So, after 47 years of operation and two State shutdowns, the owners of our club made the decision to close operations permanently as of August 1, 2020.

I can say that, without a doubt that it was the most difficult time of my business career. Having to terminate 256 dedicated and outstanding individuals was awful. But, then, having to close the programs for children and adults with cancer; our spinal cord and paralysis and Parkinson's programs and the many other community outreach programs was simply heartbreaking.

The other thing to remember is that it is really devastating to your members and the community in which you operate. In our case, the club truly had become a second home for many people: children grew up at the club, and in some cases, we had second and third generations as members. Lifelong friendships were formed, and many people met their spouse/significant other at the club. Many members wrote to us and said that the closure of the club was like a death in the family.

It is never an easy or enjoyable job to have to close a business, and in our case, a health club, but if there is one thing you should do, it is to be transparent and regular with your communication to both your members and your staff. Beginning is mid-February of 2020, I began sending weekly emails, with attachments to members and our managers, and at least monthly to all staff. We also held separate monthly Zoom calls with members and staff. I did my best to keep members and staff up to date on everything I knew: the status of the closure and my communication with local county officials; our financial position and challenges; what we were doing to assure proper health standards and safety once we were allowed to reopen the club; decisions made to retain all staff and the reasons for that; the need to adhere to all state and local guidelines, including social distancing, good hygiene and the wearing of masks at all times inside the club. At the end of each Zoom call, and with all emails, I addressed every question and did not shy away from anything.

The number of positive emails that continued to come back (in excess of 2,000 total), even after I announced the club closure was not only amazing but really overwhelming. One thing that both members and staff commented on was how much they appreciated the transparency and consistent communication. I would also suggest that, if you are forced with this same reality, remember that, as a leader, you need to come across with both written and vocal communication in a calming and sincere way.

Now, for the good news: The Claremont Club has been sold to the McKay family who own, among other businesses, a multi-use club in Carmel, California. So, The Claremont Club will serve the Claremont and surrounding communities once again.

So, be positive, and let's look forward to a much better 2021. Our industry is essential to the health and wellbeing of people. Remember, Exercise is Medicine. To be honest, it is the most powerful medicine we have.

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