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GNC Temporarily Closes 4,400 Stores to Overhaul Pricing System

GNC Temporarily Closes 4,400 Stores to Overhaul Pricing System

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Wednesday, 28 December 2016 01:44 PM

Vitamin retailer GNC Holdings Inc. closed its 4,400 U.S. stores Wednesday to overhaul its pricing system, which featured different prices on some labels.

The move had been expected and had been announced about two weeks ago.

Executives decided the only way to fix things was to start over, according to The Wall Street Journal.

GNC (NYSE: GNC), based in Pittsburgh, runs a chain of health and nutrition stores selling dietary supplements like protein powders and vitamins.

When the stores reopen Thursday, labels for GNC’s protein powders, herbal remedies and nutritional supplements will feature just one price. There will still be discounts, but about half of the company’s products will start at lower prices than before, while a quarter of the prices will be higher, says GNC’s chief marketing officer, Jeff Hennion.

GNC will launch what the company is calling "One New GNC" on Thursday. There will be a single price for items sold in the store and on GNC.com, replacing multiple pricing structures across the various channels and membership levels. The company is also launching a new mobile app and a new loyalty program named My GNC Rewards.

Executives have conceded that the pricing at GNC was a "badly broken business model" that was in need of a change.

"Pricing has been a particular issue for our brand," Robert Moran, interim chief executive officer of GNC, told analysts during a conference call in October. He vowed to change how GNC prices and promotes its products to eliminate confusion.

“The New GNC leaves the old, broken model behind,” Moran told TheStreet.com. “We’re confident it will have a positive impact on the business, but it will take time for the changes to take hold and translate to improved financial results.”

Earlier this month, GNC's talks on a potential sale have stalled following disagreements over the structure of a deal for the U.S. vitamin and supplement brand, people with knowledge of the matter told Bloomberg.

The retailer had held discussions with several Chinese suitors about a sale of the entire company, the people said, asking not to be identified as the information is private. The Chinese firms expressed interest only in buying GNC’s Asian business and didn’t want to take over its network of more than 6,700 retail outlets in the U.S., according to the people.

GNC told interested parties it was unwilling to carve out its Asian operations and thereby lose access to a key growth market, the people said.

(Newsmax wire services contributed to this report).

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Vitamin retailer GNC Holdings, Inc. (NYSE: GNC) closed its 4,400 U.S. stores Wednesday to overhaul its pricing system, which featured different prices on some labels.
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2016-44-28
Wednesday, 28 December 2016 01:44 PM
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