GNC Files For Bankruptcy Protection
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GNC started in 1935 when a healthy dude named David Shakarian opened a health-food shop selling yogurt and sandwiches in downtown Pittsburgh. The chain rode a wave of interest in nutrition, eventually expanding to over 9,000 outlets! It now has approximately 5,200 retail locations throughout the U.S., including around 1,600 Rite Aid store-within-a-store locations and approximately 200 locations in Canada. They also operate in about 50 international markets. Unfortunately, GNC has now filed for bankruptcy protection with the aim of selling their business and closing the doors on 800 to 1200 stores. The legacy retailer’s Chapter 11 petition filed in the U.S. allows the retailer to keep operating and shut hundreds of under-performing stores. GNC is proposing a plan to either restructure their company or just sell the whole enchilada! Recently, GNC began the process of selling to a potential buyer associated with their largest shareholder China-based Harbin Pharmaceutical Group Holding Co. The agreement sets an initial bidding price of $760 million for GNC, subject to a bankruptcy judge’s approval. A higher bid may be presented and accepted instead of just the standalone planned transaction according to sources. GNC expects to confirm a standalone plan of reorganization or a sale of the company by the fall. Interestingly, GNC’s U.S. and international franchise partners and its corporate operations in Ireland, which are separate legal entities, aren’t part of the bankruptcy. The company said it expects to file in a Canadian court seeking to have the U.S. proceeding designated to cover assets there. Below we have listed the stores in Canada that will be impacted.
Many GNC Stores Have Suffered Fallen Sales
But will a turnaround of the company work this summer during Covid-19 pandemic we’re still in? This year’s first quarter financials included a $200 million net loss! Most of GNC’s outlets are in malls and strip shopping centers, forcing them to contend with the same declines in foot traffic that have affected other retailers. Sales at brick-and-mortar stores have fallen further due to stay-at-home orders linked with Covid-19 and the wariness of some to venture out in public. Interest in buying online from Amazon and directly from the supplement companies themselves has also increased at a tremendous rate making it even harder for GNC to survive. Over the past year, GNC started to reduce its store-count in the U.S. and Canada, while investing in its online presence. As part of the bankruptcy restructuring, GNC will seek to speed up closures of at least 800 to 1,200 stores. The company said it will honour existing gift cards, maintain its loyalty program, and keep its existing policies for returns and refunds.
“This acceleration will allow GNC to invest in the appropriate areas to evolve for the future, better positioning the company to meet current and future consumer demand around the world,” the company said.
29 GNC Stores in Canada Will Close
- Erin Mills Town Centre, Mississauga
- Markham Town Centre, Markham
- Cf Masonville Place, London
- Willowbrook S.C., Langley BC
- Brentwood Towne Centre, Burnaby BC
- Westside Market Village, Orangeville
- Marlborough Mall, Calgary
- Bonnie Doon S.C., Edmonton
- Georgian Mall, Barrie
- Markham Steeles Sc, Scarborough
- Dawson Mall, Dawson Creek BC
- Colussus Centre, Vaughan ON
- Cataraqui Town Center, Kingston
- St Claire & Runnymede Rd, Toronto
- Eagle Landing Sc, Chilliwack BC
- Smartcentres Corner Brook, Corner Brook Newfoundland
- Laurier Quebec, Quebec
- Morningside Crossing, Scarborough
- Creekside Crossing, Mississauga
- Williamsburg Tc, Kitchener
- New Sudbury Centre, Sudbury
- Brandon Shoppers, Brandon Manitoba
- Mayfair Shopping Centre, Victoria BC
- Sevenoaks Shopping Centre, Abbotsford BC
- Bower Place, Red Deer Alberta
- Lynden Park Mall, Brantford Ontario
- Queensborough Landing, New Westminster BC
- Galeries Rive Nord, Repentigny Quebec
- Shawnessy Town Centre, Calgary
Sources Consulted:
https://www.marketwatch.com/story/gnc-files-for-bankruptcy-with-plans-to...
https://business.financialpost.com/pmn/business-pmn/gnc-files-bankruptcy...
https://business.financialpost.com/pmn/business-pmn/gnc-files-bankruptcy...