Vitamin and dietary supplement company GNC has filed for bankruptcy.
GNC cited, among other reasons, the financial toll of the COVID-19 pandemic. Sales at the chain had already been declining before the health crisis, but GNC said stay-home-orders had a “dramatic negative impact” on its business.
Before the pandemic, the company had nearly $1 billion worth of debt. Its refinancing plans were derailed this year due to the pandemic, but company officials are optimistic that the bankruptcy filing will help to get on a more sustainable track.
Bankruptcy will give GNC the "opportunity to improve our balance sheet while continuing to advance our business strategy, right-size our corporate store portfolio, and strengthen our brands to protect the long-term sustainability of our company,” the company said in a statement.
"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 structure and balance sheet.”
Closing nearly a quarter of stores
GNC aims to emerge from bankruptcy in the fall “better positioned to meet the strong consumer demand for health and wellness products by executing on omnichannel and brand strategies.” In the meantime, it’s closing up to 20 percent of its stores (up to 1,200 stores) and looking for a buyer.
“GNC remains committed to delivering wellness solutions to its consumers through easier and enhanced options to live well, from a strong product pipeline to an improved e-commerce experience,” the company said, adding that it will be launching the option to buy online and pick-up in-store later this year.
A number of other retailers have filed for bankruptcy in the wake of the unexpected health crisis. Last month, J.C. Penney, J.Crew, Neiman Marcus, and Stage Stores (SSI) all filed for bankruptcy due to a significant decrease in sales.