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GNC is the latest retailer to file for bankruptcy and reveal store closures amid the coronavirus pandemic.
Pittsburgh-based parent company GNC Holdings filed for Chapter 11 bankruptcy protection in a Delaware court late Tuesday evening with the intention of selling itself. The company set the purchase price at $760 million. The health and wellness company, known for selling vitamins, supplements and other personal care beauty products also said it plans to close between 800 and 1,200 stores out of its 7,300 locations worldwide (roughly 5,200 in the U.S.) as part of its reorganization strategy.
“GNC expects the Chapter 11 process will benefit its stakeholders and best position the company for long-term success,” the company said in a statement. “Importantly, the overwhelming support of the company’s creditors will enable GNC to emerge from this process expeditiously.”
The restructuring process is being advised by Latham & Watkins LLP, FTI Consulting and Evercore. Bank of China Limited Macau Branch has been hired by GNC as a debt adviser.
U.S. and international franchise partners, as well as corporate operations in Ireland, are not a part of the filing.
With a possible sale, the company said it hopes to exit bankruptcy by the fall.
GNC and all of its subsidiaries, along with the related e-commerce business, will remain open for business during the restructuring process. Currently, many stores are open for curbside pickup throughout the U.S. as the nation slowly emerges from lockdown. The retailer plans to offer BOPIS later this year.
The company said it has about $130 million in liquidity, a combination of “new money” debtor-in-possession financing and an existing ABL credit facility.
“While the debtors would have preferred to wait out the current instabilities of the financial markets and retail industry, they simply could not afford to do so,” the bankruptcy documents stated. “The relief sought in this motion is critical to preserve liquidity and maintain the debtors’ viability as a going concern.”
Shares of GNC, which closed down 6.9 percent to 81 cents each on Tuesday, are down more than 40 percent year-over-year.
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