GNC, the vitamins and supplements retailer, said Wednesday it would close hundreds of stores – including its Geneseo location. The announcement came a day after the company filed for Chapter 11 bankruptcy.
The company said it expected to close between 800 and 1,200 stores. The retailer had about 7,300 stores at the end of March.
GNC acknowledged in a letter to shoppers that the business had faced ongoing financial pressures for the past several years as it worked to pay down debt and reposition GNC to be more competitive. The letter said the company was making significant progress when 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.”
“As a result, we felt the best opportunity for us to continue to improve our capital structure and address certain operational issues was to restructure through a Chapter 11 reorganization,” the letter said. “This gives us the 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.”
GNC had warned in early May filings with the U.S. Securities and Exchange Commission that bankruptcy and store closings were likely. The company said sales at its U.S. stores were down 10.1 percent in the first quarter of 2020, compared to 2019, according to SEC filings.
Nine stores in New York State were on the list of 248 stores to close that was released on Wednesday afternoon. A GNC in Northgate Plaza, 3848 Dewey Ave., in Greece, and another in Lakewood, Chautauqua County, were also on the list.
No timetable for the store closings was announced. The company’s letter noted “that even closing stores may remain open for a period of time.”
Gift cards will continue to be honored, and loyalty reward points will continue to be valid and accrue towards cash back rewards, pending approval from the bankruptcy court.
The list of store closings covered 42 states, Puerto Rico and Canada.
The GNC letter indicated that the company was seeking a buyer and had secured $130 million in financing to aid in its restructuring.
GNC struggled to keep up with competitors due to its reliance on a large number of physical stores and a slow adoption of e-commerce, according to a story published this week by Business Wire.
The Business Wire story reported that when consumers shifted to making purchases online during the coronavirus outbreak, GNC’s e-commerce experience lagged behind, according to Shelly Socol, CEO of e-commerce agency One Rockwell.
“GNC has found itself in a similar situation to J.Crew, JCPenney, Sears, and any of those big retailers that were not on their game and investing in DTC,” Socol told Business Insider in May. “They’re playing catch-up with e-commerce that has not been upgraded or optimized at the level it needs to be at to navigate the time that we’re in.”