GNC cuts 140 drivers in move to outsource product distribution
GNC Holdings Inc. has eliminated all 140 of its driver jobs and outsourced them at its three distribution centers across the country, including 70 jobs at the facility in Leetsdale.
The Downtown-based retailer will begin using contract workers to transport its vitamins, supplements and sports nutrition products to its stores, GNC spokesman Greg Miller said.
GNC has roughly 6,200 company-operated and franchise stores nationwide and about 2,100 franchise stores overseas.
Companies usually outsource functions as a way to save money on salaries and other benefits, such as health insurance and pensions, which could be a significant expense. Miller declined to say how much money the switch to contract workers might save.
“We think this is an appropriate and efficient approach,” he said.
The layoffs leave the Leetsdale facility with about 300 workers. About 500 more remain at GNC's two other distribution centers in Phoenix and Anderson, S.C.
The drivers were not represented by a union, Miller said. They will receive severance and benefit packages.
Analyst Kurt Frederick at Webush Securities, San Francisco, did now know why GNC fired its drivers but said GNC has performed well financially, particularly since revising its Gold Card membership program in May.
GNC's second-quarter earnings rose 7.5 percent to $72 million from $67 million a year earlier. Its sales increased 9.2 percent to $676 million from $619 million.
In response to earlier customer complaints, GNC changed the Gold Card program so that members could access membership discounts throughout the month, instead of just seven days a month. The revisions helped to add customers, which is providing GNC with a larger database of customers to target with promotions, the analyst said.
“That gave them momentum in terms of sales because it got people to come into the stores more frequently,” Frederick said.
The analyst added that GNC's recent focus on growing internationally should benefit the retailer because it is “getting saturated” with stores in the United States.
Earlier this month, for example, GNC announced the acquisition of a leading sports-nutrition, e-commerce retailer in the United Kingdom called A1 Sports Limited. The company is expected to post 2013 sales of about $32.5 million this year.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- First Niagara to cut 200 jobs; Pittsburgh impact unclear
- 8 Western Pennsylvania hospitals penalized over infections
- Beacons track shoppers’ smartphones amid retailers’ aisles
- Pennsylvania jobless rate drops to 5.1 percent
- Nonprofit hospitals in Western Pa. feel pain in finances despite Affordable Care Act
- EDMC accused in GI Bill scheme
- Western Pa. utility workers OK contract with FirstEnergy
- Ford expands air bag recall across U.S.
- FedEx to buy product-return firm Genco in e-commerce push
- Online price battle heats up with intraday price fluctuations
- Hospital finances still crying ‘ouch’