GNC files for bankruptcy, plans to close up to 1,200 stores

Pittsburgh-based health and wellness retailer GNC Corp. filed for bankruptcy and plans to close 800 to 1,200 stores, including several in Western Pennsylvania, unless it finds a buyer willing to pay at least $760 million under an agreement with lenders.

Saying the covid-19 pandemic “had a dramatic negative impact on our business,” GNC filed for Chapter 11 bankruptcy on Tuesday to provide protection from creditors while it either reorganizes or sells the business in a bankruptcy court auction.

The company, founded in Pittsburgh 85 years ago, also has an agreement with its lenders for a prearranged, stand-alone reorganization plan, GNC said.

A significant majority of secured lenders backed either option, the company reported in its filing. An affiliate of its largest shareholder, China-based Harbin Pharmaceutical Group, was among those listed as supporting a sale.

In 2018, GNC announced it was receiving a $300 million investment from Harbin, also known as Hayao. The deal included a joint venture for making and selling GNC-branded products in China.

GNC said it expects a resolution to its future by the fall.

Stores slated to be closed initially include ones in Butler, Cranberry, Clearfield, Monroeville, Hyde Park Plaza in Allegheny Township and Pine Creek Plaza in McCandless. GNC plans to cancel existing leases and intends to shift resources to stand-alone store locations where it sees more customers. The company said it will provide updates about potential closures during the bankruptcy process.

GNC has more than 4,800 retail locations in the United States, including more than 1,000 franchised stores and 1,200 Rite Aid store-within-a-store locations. It has franchise stores in 46 international markets. Franchisees, which are separate legal entities, are not included in the bankruptcy filing.

Among lenders that stand to lose the most in the bankruptcy is Bank of New York Mellon in Pittsburgh, which holds $157.9 million worth of GNC’s unsecured debt. GNC said it has 100,000 creditors and assets and liabilities in the range of $1 billion to $10 billion.

Last month, GNC reached a last-minute deal with creditors that provided a reprieve from bankruptcy for 30 to 90 days. It had faced a May 16 deadline to reduce its debt to less than $50 million.

GNC stock was trading at 55 cents a share Wednesday afternoon, down 26 cents from its opening.

Additional information about the case and a current list of store closures can be found at GNCevolution.com.