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.”