As it seeks to optimize its store portfolio, GNC is planning on closing approximately 200 stores in 2018. And the retailer said a very limited number of stores will open this year, Retail Dive reported.
Still, GNC is still working towards renegotiating leases and relocating stores. As of the end of March, the retailer had almost 3,400 corporate stores within the U.S. and Canada. The company also had just under 1,100 franchised locations in the U.S. and 2,428 franchised stores in Rite Aid. In all, GNC has just over 8,900 stores throughout the world.
As far as sales are concerned, GNC is seeing revenue growth overseas even as revenues within the U.S. and Canada falter. Though revenues in U.S. and Canada dropped 4.5 percent in Q1 of 2018 — $24.2 million — from the prior year quarter, international sales increased 0.8 percent — $0.3 million — over the same period. That increase was mainly fueled by increased China cross-border eCommerce sales.
The news comes as GNC announced in 2016 that it planned to sell off 1,000 of its locations beginning with 200 that year. It’s a plan, the company had noted, built out from the supplement retailer’s agreement with Sun Holdings to refranchise 84 of its stores to the latter company for $17 million.
“We are very pleased to announce the completion of this refranchising agreement, which is part of our strategic plan to transition approximately 200 company-owned store locations to an asset-light franchise model this year and 1,000 company-owned store locations over the next three to four years,” said Mike Archbold in 2016, who was the CEO of GNC at the time.
Retail Dive posited in 2016 that a large factor, which might have contributed to GNC’s big selloff, is a perception among consumers — backed up by an increasing amount of research — that the alleged benefits of the supplements, on which the retail chain has built its business, are not legitimate. In some cases, noted the outlet, supplements might even be harmful.