GNC, the 85-year old seller of vitamins and dietary supplements, filed for bankruptcy late Tuesday and said it plans to close as many as 1,374 stores, or nearly half of its company-owned locations, in the U.S. and Canada by the end of the year.
GNC identified 248 stores that will close imminently as part of the restructuring process. Stores are closing in 42 states, as well as in Puerto Rico and Canada. GNC said the closures will help it cut costs as it attempts to emerge from bankruptcy over the next year and will save the chain from shutting down completely.
The retailer also said in a filing Wednesday it had paid CEO Ken Martindale a $2.2 million bonus five days before filing for Chapter 11 bankruptcy protection in a federal court. GNC called the management payouts, which also went to the CFO and other top executives, “retention bonuses.” Yet Martindale, who was paid $7.1 million in 2019, will get to keep 75% of the cash bonus even if GNC doesn’t emerge from bankruptcy. He joined the company in September 2017.
In a letter to shoppers, GNC said 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.”