By | Rachel Brooks
Staff | Telegraph Local
Above, GNC had stores all over the world. This is a Hong Kong location. Photo by ISAMDIMMIA taken January 2020, CC BY SA 4.0.
GNC Holdings Inc. the parent company of the GNC health and wellness retail stores have filed for Chapter 11 bankruptcy and plan closings. This was reported by USA Today at 7:24 am on June 24. The chain plans to permanently close 1,200 stores.
The chain was based in Pittsburgh. It has 5,200 retail locations in the United States and 7,300 locations globally. As of March 31, GNC stated that the COVID-19 pandemic has “accelerated” the need to file bankruptcy.
“The COVID-19 pandemic created a situation where we were unable to accomplish our refinancing and the abrupt change in the operating environment had a dramatic negative impact on our business,”said GNC’s FAQ page on its official website. This is further citing USA Today.
GNC has also released a news update on their bankruptcy proceedings. The news release was published by Cision PR Newswire by GNC Holdings Inc. on June 23.
“Using Chapter 11 framework to right-size store portfolio and improve its capital structure
Pursues dual-track restructuring for standalone plan or going concern sale process, with the support of certain of its secured lenders, an affiliate of its largest shareholder, Harbin Pharmaceutical Group Holding Co., Ltd., and GNC’s largest vendor and a joint venture partner, IVC
Obtains ~$130 million in committed additional liquidity from certain of its secured lenders in the form of new financing and loan amendments
Expects to emerge better positioned to meet the strong consumer demand for health and wellness products by executing on omnichannel and brand strategies.
Business operations continue; all U.S. and international franchise partners and corporate entities outside North America are not included in Chapter 11 process,” begins the news release by GNC Holdings Inc.
The news release then proceeds to explain the reason for GNC’s bankruptcy in its entirety pre and post COVID-19 pandemic.
The news release concluded by giving insights on GNC’s forward-looking statements.
“GNC undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results could differ materially from those described or implied by such forward-looking statements. For a more detailed discussion of important factors that may materially affect such forward-looking statements, please refer to GNC’s Annual Report on Form 10-K for the year ended December 31, 2019 and GNC’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020,” says the Cision PR Newswire statement.
GNC’s social media does not yet advertise any information regarding liquidation sales for the locations that will close.
Fortune reports that GNC is among the latest retailers to file for bankruptcy under the weight of COVID-19 surge. The company has joined the ranks of other COVID-19 casualties which includes J.C. Penney, Neiman Marcus, J.Crew, Stage Stores, and Tuesday Morning. All of these stores were “debt-laden” and collapsed under the weight of COVID-19 crisis.
GNC may not disappear entirely. Fortune reports that the company recently shared a statement regarding potential reinvestment.
“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,” said GNC as quoted by Fortune.