GNC files for bankruptcy and will close up to 1,200 stores

The 85-year-old vitamin and dietary supplement company has been burdened with nearly $ 1 billion in debt and has faced declining sales at its physical locations since before the pandemic. However, GNC said orders to stay home during the Covid-19 pandemic prevented the company from achieving its refinancing plans due to the abrupt “dramatic negative impact” on its business.
GNC will continue to operate, but will become a smaller company. It plans to close up to 20% of its 5,800 retail stores, equivalent to 1,200 locations in the United States. GNC also sells its products for an additional 1,200. aid ritual (RAD) stories.

It secured $ 130 million in fresh financing from its largest supplier, the IVC vitamin supplier, to help it restructure. GNC aims to emerge from bankruptcy in the fall.

GNC explained that bankruptcy will provide the company “with the opportunity to improve our balance sheet as we continue to advance our business strategy, adjusting our portfolio of corporate stores and strengthening our brands to protect the long-term sustainability of our company.”

About 30% of its stores in the United States and Canada were forced to temporarily close due to the pandemic. In its first-quarter earnings report released in May, losses accelerated to $ 200 million, far more than the $ 15 million it lost during the same period in 2019, due to store closings.

“The Chapter 11 process will allow us to accelerate these strategies and invest in the appropriate areas to evolve in the future, while improving our capital and balance structure,” GNC said in a letter to buyers.