FitLab files Chapter 11 after Nike partnership ends and supply shocks bite

What happened

FitLab and its affiliates filed for Chapter 11 on Oct. 26 in the US Bankruptcy Court for the District of Delaware. Court papers show the company lists assets of $10 million to $50 million and debts exceeding $100 million. The first hearing is set for Thursday.

The company manufactures cardio machines and operates boutique fitness locations. It grew by buying businesses, acquiring Assault Fitness in 2024 and picking up yoga operator Y7 Studio for $14 million in the prior year.

Why it collapsed

FitLab traces the filing to supply chain turmoil and the collapse of a major tie-up with Nike Inc. Nike led the series B round with $20 million, and FitLab says it funneled almost the entire amount into opening and running 10 Nike-branded locations in Southern California and Austin. Those sites carried "high costs" to meet service and brand standards, Chief Restructuring Officer Nicholas Rubin said, and when Nike pulled the plug on the arrangement in early 2026, FitLab was stuck with 10 leases and facilities that were unable to keep using the Nike Studios banner after investing for more than two years.

Rubin added that disputes with landlords and operating fewer studios piled on financial strain while other parts of the business were already under pressure.

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The supply-chain hit and next steps

Beyond the Nike fallout, Rubin said Assault Fitness faced "substantial uncertainty" over import costs linked to President Donald Trump's tariff policies. One major manufacturer then required Assault Fitness to change suppliers, a search that lasted about six to eight months and left the brand "effectively out of the market for an extended period," including the 2025 holiday shopping season.

In Chapter 11, FitLab says it plans to market and sell its assets and use the process to more easily exit expensive leases. A Nike representative did not promptly reply to a request for comment. Nike, which also owns Jordan and Converse, is dealing with weaker sales, job cuts and is pursuing a restructuring that it expects to trim about $2.5 billion in costs over the next five years.

What it means for investors

In plain English: this is a case of concentrated partnership risk colliding with supply chain whiplash. Watch the Chapter 11 sale process and potential lease rejections for clues on recoveries to landlords and vendors, and keep an eye on how ongoing tariff policy uncertainty continues to flow through fitness hardware makers' costs.

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