GNC (NYSE:GNC) is filing for Chapter 11 bankruptcy protection and the news is sending its stock plummeting on Wednesday.
The GNC bankruptcy was announced by the company during a press release. The company details its plans, which include agreements with lenders to restructure its business during the process.
One of the biggest changes that GNC will go through as part of the bankruptcy is closing stores. The company says that it currently plans to close between 800 and 1,200 locations. That could have it reducing its store count by as much as 16.4% from its current total of roughly 7,300 stores.
GNC notes that it was already considering store closures prior to bankruptcy. It has been working for a year to identify underperforming locations and was preparing to close them over time. However, the bankruptcy filing has it speeding up this process.
GNC also mentions that it has a standalone agreement with a majority of lenders to make changes to its business. The goal of this is to return it to strong performance and allow it to exit bankruptcy as a better company.
If that standalone plan doesn’t work out, the company and its lenders have also agreed to sell the business. The agreement includes a $760 million purchase price that could go higher during bidding.
GNC will continue to operate through the bankruptcy. That includes at its retail locations, as well as selling products via its online store.
GNC stock was down 29% as of Wednesday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.
