GNC Takes $433 Million Loss Amid Mass Rebranding

00aonenewgncGNC’s furious attempt at a turnaround is not looking promising. The retailer reported a net loss of $433 million in Q4, demonstrating that the brand will need more than a new marketing strategy to get back on its feet.

GNC closed all 4,400+ of its stores on Dec. 28, 2016 before reopening its doors the next day as part of a companywide rebranding campaign. The “One New GNC” campaign emphasizes a single-tiered pricing strategy both in-store and on, replacing multiple pricing structures across channels and membership levels. The retailer also revamped its loyalty structure, launching a free loyalty program (myGNC Rewards) and a paid program (PRO Access).

In a Retail TouchPoints contributed blog, Bill Gullan, President of Finch Brands, noted that “GNC is using a cosmetic fix to address fundamental issues” and that he wasn’t sure if the changes would turn the business around.


“There’s no question GNC is addressing areas in which it has fallen behind,” Gullan wrote. “Yet will a new store concept — driven by technology — win back consumers the company lost to other channels or direct businesses? Put another way, I’m not so sure the world needs a 9,000-unit specialty vitamin and supplement store when its highest interest categories are available everywhere from Amazon to food/drug/mass.”

There were few bright spots anywhere in GNC’s quarterly results. The retailer posted Q4 revenue of $569 million, down from $629 million a year ago. Same store sales decreased 12% in domestic company-owned stores (including, which contributed 4.5% of the decrease) in the quarter, while same store sales at franchised locations decreased 6%.

For 2016, GNC recorded a net loss of $286.3 million, compared with a $219.3 million profit the year before, as sales declined 6.5% and 6.8%, respectively, in company-owned and franchise stores.

NFL, Fox Nix GNC Super Bowl Spot

Unfortunately for GNC, its pursuit of legal action against Fox Broadcasting after the Super Bowl may be the most relevant story for the brand in 2017. Fox sold the chain a 30-second TV spot during the game, but the NFL made Fox pull the spot only days before the Super Bowl because GNC sells some products containing two substances that are banned by the NFL.

Fox sold 30-second slots in the Super Bowl for an estimated $5 million, which is more than a quarter of what GNC spent on measured media in the U.S. in all of 2015, according to Kantar Media. It’s likely that GNC bet a lot on this advertisement to bring the brand some good fortune, but it only seems to have created more hassles.

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