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GNC furloughs employees, cuts bonuses as it faces pandemic
The struggling supplements retailer makes "difficult decisions" as it tries to ride out coronavirus-related economic difficulties with $6 million debt hanging over its head.
April 3, 2020
2 Min Read
GNC Holdings Inc. announced today that, as a result of the COVID-19 pandemic, it has made some difficult decisions to protect the long-term prospects for the business.
Given the unprecedented economic disruption caused by this health crisis, management has implemented measures to reduce expenses and maintain flexibility to manage through these challenging times:
Reducing operating expenses, including a hiring freeze, eliminating corporate merit increases and other implementing cost-saving initiatives.
Decreasing the number of field leadership roles as the company continues to optimize the store fleet.
Reducing costs across the business with the exception of digital capabilities.
Furloughing a significant portion of store and corporate associates across all levels of the organization.
Furloughed associates will maintain health benefits in GNC-sponsored plans, with GNC funding 100% of the premium through the month of April and perhaps longer.
“These decisions were extremely difficult but necessary as we navigate the challenges ahead of us. We are focused on our people and our business, and because of that we had to take decisive action,” said Ken Martindale, chairman and chief executive officer. “We expect these measures will give us the footing to continue to provide solutions to help others live well.”
In mid-March, GNC Holdings Inc. reported to the Securities and Exchange Commission that it does not have enough cash to pay a $441.5 million Tranche B2 loan due in May. During a March 26 conference call, Chief Financial Officer Tricia Tolivar said Asian lenders had decided not to refinance that loan and other debt.
Tolivar would not make assurances during the call that the company will be able to refinance its debts.
Also during that call, Martindale reported that 25% of the company's stores in the United States and Canada were temporarily closed because of coronavirus-related stay-at-home directives and other orders.
Source: GNC Holdings Inc.
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