Vitamin World, a 334-store chain health supplements seller, declared Chapter 11 insolvency reorganization today. The filing will lead the Holbrook, NY-based firm to close 51 shops initially while it continues to examine its shop portfolio.
Vitamin World has actually been working with New York-based RCS Real Estate Advisors to lower its tenancy costs.
The vitamin supplement business submitted bankruptcy in order to leave property leases that were negotiated by its previous owners, according to Ivan L. Friedman, RCS president and CEO.
Vitamin World CEO, Michael Madden, said in a statement, “This action will empower us to progress as a more powerful organization that can and will continue to service our countless loyal customers with superior offerings by means of retail and online channels.”
Considering that February 2016, Vitamin World has actually closed 45 underperforming stores. This effort led to over $2 million in EBITDA savings.
RCS has recognized 51 additional stores that they plan to close throughout the Chapter 11 proceedings. Vitamin World began selling down the inventory at these shops this past weekend and will ask the court to turn down the leases since Sept. 30, 2017.
The seller stated it was continuing to evaluate its leases for extra underperforming locations and will try to renegotiate the lease at those. If those settlements are unsuccessful, the company said it will be required to turn down those leases as well.
Centre Lane Partners, a New York-based private financial investment company, got Vitamin World in February 2016 from the Carlyle Group.
In its bankruptcy filing, Vitamin World said the its company began suffering this year from constrained liquidity brought on by “considerable supply chain and ingredient schedule interruptions, a struggling retail market, above-market rents and underperforming retailers.”