Retail

Vitamin Retailer GNC Files Chapter 11 Plan That Includes $760M Bid For The Chain

Vitamin Retailer GNC Files 'Prepackaged' Chapter 11 Plan

Vitamin store chain GNC Holdings filed a “prepackaged” Chapter 11 bankruptcy plan, saying it has an offer to sell the company for $760 million and has backing from some 90 percent of its creditors, according to a statement.

“As outlined in both potential paths, the Company expects to use this process to improve its balance sheet and capital structure while continuing to advance its business strategy, right-size GNC’s corporate store portfolio and strengthen its brands to protect the long-term sustainability of its business,” the company said in the announcement.

The retailer, along with Harbin Pharmaceutical Group Holding Co., Ltd. and a sizable majority of supporting secured lenders, have come to a deal “in principle” for a sale of GNC’s business. A $760 million purchase price was noted in a term sheet outlining the arrangement, which would be put into place via court auction. At that time, improved bids can be brought forward.

Additionally, the retailer has secured roughly $130 million in further liquidity. According to the announcement, “the Company is confident that between financing and cash flow from normal operations, and with the continued support of its largest vendor, GNC will meet its go-forward financial commitments as it works to achieve its financial objectives.”

The retailer has been running a “store portfolio optimization strategy” to shutter underperforming retail locations as it continues backing omnichannel and brand strategies to satisfy shopper demand. “This process will enable GNC to accelerate these strategies, including its store portfolio optimization,” the company said.

GNC foresees that it will speed up the shuttering of at least 800 to 1,200 retail locations. That will enable the retailer to put funds toward the necessary spaces to “evolve for the future.”

In separate news, Tuesday Morning Corporation said in May that it had filed for Chapter 11 bankruptcy to seek “financial and operational reorganization.”

——————————

PYMNTS LIVE ROUNDTABLE: TUESDAY, JULY 14, 2020 AT 12:00 PM (ET)

Digital transformation has been forcefully accelerated, but how does that agility translate into the fight against COVID-era attacks and sophisticated identity threats? As millions embrace online everything, preserving digital trust now falls mostly on banks and FIs. Now, advances in identity data and using different weights on the payment mix afford new opportunities to arm organizations and their customers against cyberthreats. From the latest in machine learning for fraud and risk, to corporate treasury teams working in new ways with new datasets, learn from experts how digital identity, together with advances like real-time payments, combine to engender trust and enrich relationships.

TRENDING RIGHT NOW