GNC files for bankruptcy, will close 2 Lehigh Valley storesThe Morning Call — Jon Harris The Morning Call
June 30--GNC Holdings Inc., the struggling Pittsburgh vitamin and dietary supplement chain, has filed for bankruptcy and is planning to close up to 1,200 of its stores.
So far, the chain has posted a list of 248 planned store closures across the United States and Canada. That list identifies 17 stores in Pennsylvania, including GNC locations at Lehigh Valley Mall in Whitehall Township and South Mall in Salisbury Township.
An additional 726 store closures are listed in U.S. Bankruptcy Court documents from last week, which includes another 23 locations in Pennsylvania but none in the Lehigh Valley.
In addition to its stores at Lehigh Valley and South malls, GNC has several other locations throughout the Lehigh Valley. The chain, like other retailers, has long been struggling with an overstored portfolio, online competition and debt (about $900 million). The coronavirus pandemic, which led to the temporary closure of 1,300 -- or 40% -- of GNC’s U.S. and Canadian stores, only accelerated the chain’s issues.
Despite its struggles, GNC said on June 23, the date of its Chapter 11 petition, that it expects to emerge from bankruptcy.
“With the support of its lenders and key stakeholders, the company expects to confirm a standalone plan of reorganization or consummate a sale that will enable the business to exit from this process in the fall of this year,” GNC said in a news release.
In the first quarter, GNC reported company-owned same-store sales declined 10% compared with the year-earlier period. Excluding the pandemic’s effect on the second half of March, sales would have declined just over 4%.
For the quarter, GNC reported a net loss of $200 million, compared with a net loss of $15 million in the first quarter of 2019.
By mid-March, the company’s stock price fell from $1.08 a share to around 50 cents a share, where it has floated around since.
Five days before filing for bankruptcy, GNC also approved nearly $4 million in retention bonuses to five executives, money that “will be earned only upon the company’s exit from the bankruptcy process,” according to a U.S. Securities and Exchange Commission filing.
As of March 31, GNC had about 7,300 locations across the globe. About 5,200 retail locations are in the United States, which includes roughly 1,600 store-within-a-store sites at Rite Aid locations.
Morning Call reporter Jon Harris can be reached at 610-820-6779 or at firstname.lastname@example.org.
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