GNC's desperate store sell-off reveals deeper struggles in retail revival

GNC Holdings is pushing ahead with plans to sell off hundreds of its stores as the vitamin retailer faces ongoing challenges. The company's CEO has admitted that efforts to revive its core business are taking longer than expected. Meanwhile, sales have dropped in both company-run and franchise locations.

The company recently agreed to sell 84 of its stores to Sun Holdings for $17 million. This move is part of a broader strategy to offload 200 company-owned locations this year and up to 1,000 more over the next few years. GNC currently operates around 9,000 stores across the US, including 2,000 inside Rite Aid pharmacies.

Interest in buying these stores has been strong, with both new and existing franchisees showing keen participation. However, the brand's struggles are clear in its latest financial figures. First-quarter sales fell by 2.6% in company-owned stores and 5.6% in franchise locations. Heavy discounting of near-expiry supplements has also hurt revenue.

GNC's reputation took a hit in 2015 when New York Attorney General Eric Schneiderman issued cease-and-desist letters over mislabelling and quality concerns. The company settled the case in March 2016, but scrutiny of the supplement industry has persisted. Reports, including from The New York Times, have questioned the scientific backing for many supplement claims.

The store sales are part of GNC's effort to streamline operations amid a difficult retail environment. With franchisees stepping in to take over locations, the company aims to reduce costs and refocus its business. Yet, the slow pace of recovery and past regulatory issues continue to weigh on its performance.