GNC declares bankruptcy and announces store closures. Two Boise-area stores on the list
GNC Holdings, which operates 7,062 stores in 50 countries selling vitamins and dietary supplements, filed for bankruptcy late Tuesday.
The 85-year-old company, headquartered in Pittsburgh, has been burdened with declining sales and nearly $1 billion in debt.
“The debtors have today filed these Chapter 11 cases amid an unprecedented health crisis with difficult social, political and economic implications,” GNC wrote in its bankruptcy petition, filed in U.S. Bankruptcy Court in Delaware. “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 company plans to close 726 underperforming stores in the United States and Canada, including two Idaho stores. Those stores are one at Mountain Home Air Force Base and one at the Shops at Eagle Promenade, at 3116 E. State St. in Eagle, according to court filings. Eventually, it plans to close up to 500 additional stores.
GNC operates two stores in Boise, one in Meridian and two in Nampa, along with one in Ontario, Oregon. It also has eight Rite-Aid store-within-a-store locations in Boise, Meridian and Caldwell. Those stores aren’t affected by the bankruptcy.
GNC, which has about 12,400 employees, obtained $130 million in new financing from vitamin vendor IVC, its largest supplier, to allow stores to continue operating. GNC looks to emerge from bankruptcy in the fall. It’s also looking for a potential buyer, with a purchase price of at least $760 million.
The bankruptcy, GNC said, will give the company an “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 that became GNC began in 1935 when David Shakarian opened a health-food store in Pittsburgh that sold yogurt and sandwiches. At one time, it had more than 9,000 stores.
GNC has struggled for many years. In 2018, it refinanced its loans and obtained a $300 million investment from Harbin Pharmaceutical Group Holdings, a Chinese company that is its largest stockholder. A Harbin subsidiary and other investors are interested in buying the company through a court-supervised sale.
Most of GNC’s stores, which include 2,803 operated by franchisees, are found in shopping malls and strip malls. Those stores have been hampered by a decrease in foot traffic. Store sales have been impacted more recently because of temporary closings brought by the coronavirus pandemic and by customers who fear going out in public.
GNC follows 15 other U.S. retailers that have declared bankruptcy in 2020. J.C. Penney, Pier 1 Imports, Tuesday Morning, Gordmans J. Crew and Neiman Marcus are among those that have filed bankruptcy petitions.
