GNC to sell 84 corporate-owned stores to a franchise powerhouse

One of the nation’s largest franchisees will soon also be operating GNC stores.



Moving ahead with its plan to reduce its corporate-owned store footprint, GNC announced plans to sell 84 company-owned locations to Dallas-based Sun Holdings for about $17 million. The retailer revealed the sale amid disappointing first quarter results.



Sun Holdings, which currently does not own any GNC locations, has over 600 franchise locations including Burger King, Popeye's, Golden Corral, CiCi's Pizza, Krispy Kreme and T. Mobile. It is ranked in the top 10 of franchisees in the United States.



"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,” said Mike Archbold, CEO, GNC, which operates approximately 9,000 locations worldwide.



In its first quarter, the health and wellness retailer earned $50.8 million, compared with $63.3 million in the year-ago period. Revenue declined to $668.9 million, from $681.3 million a year ago.



“Although we experienced positive sales trends across parts of our business, these trends were more than offset by challenges in the vitamin business, driven by the decline in Vitapak sales, and pricing pressure created by our clearing of expiring product which impacted both sales and margin during the quarter,” Archbold said. “While we are working to address the challenges in our vitamin business, we expect to face headwinds in the business for the balance of the year and are adjusting our guidance accordingly."