Pittsburgh, PA—GNC Holdings, Inc. announced in its first-quarter results on Thursday it would be selling and refranchising 84 company-owned stores to franchisee, Sun Holding, for approximately $17 million.
Mike Archbold, chief executive officer stated, "We are very pleased to announce the completion of this refranchising agreement, which is part of our strategic plan to transition approximately 200 company-owned store locations to an asset light franchise model this year and 1,000 company-owned store locations over the next three to four years."
GNC, which has more than 9,000 locations (6,700 of which are in the United States and includes 2,340 Rite Aid franchise store-within-a-store locations) reported in its first quarter a revenue decline of $668.9 million from $681.3 million from a year ago in the same quarter. The retailer also reported earnings of $50.8 million, compared to $66 million from a year ago in the same quarter.
Offsets have been due to decline in Vitapak sales, “pricing pressure” of expiring product, a decrease of same store sales by 2.6% and a decrease in domestic franchise locations sales of 5.6%.
Archbold states the company's “number one priority is our vitamin business and the steps we need to take to grow same store sales in this category through new promotions and a renewed marketing focus. In addition, we are reducing the significance of aged inventory, optimizing our assortment and training store associates to emphasize the vitamin solution to our customers."
Published on WholeFoods Magazine June 2016 (Online 4/29/2016)