GNC Holdings has become the latest retailer to fall victim to a CEO change in 2016; Chief Executive Mike Archbold is leaving the company and has resigned from its Board of Directors. Robert Moran, an Independent Director of GNC and the former CEO of PetSmart, takes over as interim CEO effective immediately.
The health and wellness supplements retailer, which has more than 9,000 corporate and franchised stores, suspended its 2016 earnings guidance as it continues its ongoing strategic review process. Since May, GNC has been reviewing strategic alternatives that could include: “accelerated refranchising strategies, capital structure optimization, partnerships and other value-creating collaborations, or a potential sale of the company.”
Archbold’s resignation comes as GNC disclosed weak Q2 results, including a same-store sales decrease of 3.7% in both its U.S. corporate stores and its e-Commerce site. The retailer fared even worse in its domestic franchise locations, with a same-store sales dip of 6.6%. Retail sales in U.S. and Canada dropped 2% to $11.7 million.
Considering the same-store sales from corporate locations include e-Commerce revenues, this is a major disappointment for the supplements retailer. Given that the health supplements industry has become a market saturated by many e-Commerce players due to its relative lack of regulation, GNC doesn’t have a real differentiation advantage any more despite its massive physical footprint.
GNC did complete the conversion of 86 corporate stores over to franchisees in Q2, remaining on track to meet its 2016 goal to refranchise 200 company-owned stores.