America Is Hit With Another Big Bankruptcy

GNC files for Chapter 11
By Neal Colgrass,  Newser Staff
Posted Jun 24, 2020 12:05 PM CDT
America Is Hit With Another Big Bankruptcy
In this April 29, 2020, file photo, a couple walks past a GNC store at the company's world headquarters in downtown Pittsburgh.   (AP Photo/Gene J. Puskar, File)

Like your vitamins and whey proteins? Better buy them now, because GNC has filed for Chapter 11 bankruptcy. The health and wellness company says it will shutter 800 to 1,200 stores and either reorganize or sell itself outright, USA Today reports. "The COVID-19 pandemic created a situation where we were unable to accomplish our refinancing and the abrupt change in the operating environment had a dramatic negative impact on our business," GNC says on its website. But the Pittsburgh-based chain—which has roughly 5,200 US stores and 7,300 worldwide—was already strapped with debt and planning to close hundreds of locations before the coronavirus hit.

In fact, GNC lacked the cash to pay nearly $700 million in debt and was warned in April that it might be delisted from the New York Stock Exchange as its share average dipped below $1, per the Pittsburgh Post-Gazette. It received financial support from Harbin Pharmaceutical Group Holding Co., a Chinese firm that became GNC's strategic partner in 2018 and agreed to pump in $300 million. Now Harbin has the right to buy GNC for $760 million. Bloomberg notes that GNC goes back to 1935, when David Shakarian opened a store selling sandwiches and yogurt in Pittsburgh. By the end of 2019, GNC employed roughly 12,400 people. (Other recent bankruptcies include Hertz, JCPenney, Pier 1, and Neiman Marcus.)

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