Michael Archbold Out as GNC’s CEO

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Michael Archbold has resigned as CEO of vitamins and supplements seller GNC Holdings, and is being replaced on an interim basis by industry veteran Bob Moran.

Moran is an Independent Director of GNC, and has served on GNC’s board since 2013. Most-recently, Moran had been the chairman and CEO of PetSmart Inc.

The change in leadership was announced in conjunction with GNC’s second-quarter earnings results. The company reported consolidated revenue of $673.2 million, a decrease of 2.4% as compared with consolidated revenue of $689.6 million for the second quarter of 2015.

“Quite simply, our results were not acceptable,” Moran said during the earnings call. “In the coming weeks and months, I will immerge myself in the details of the business and we will evaluate all aspects of it.”

Moran said he was not pleased that GNC’s same-store sales for the quarter dropped 3.7%. He said  GNC is an industry leader , and that he is confident in the business and its ability to get back on track.

“We clearly have a lot of work to do, but we are fortunate to have a talented team in place along with a loyal customer base and we are committed to delivering improved results,” Moran said. “We need to move with urgency to change the trajectory of the business, as we work to enhance our operations and maximize our potential going forward.”

CFO Tricia Tolivar said while GNC had negative comps in all stores, continued declines in mall traffic had a negative impact on year-over-year comparisons and worsened over the course of the quarter and into July.

“A significant percent of our sales happen in our mall locations, while 30% of our overall company-owned store base are in malls,” Tolivar said. “Those stores account for 35% of sales as they tend to generate higher revenue compared to our strip centers.”

Franchised stores also saw a 6.6% drop in sales. Tolivar said that’s because franchisees are not fully participating in all corporate permissions and have not fully adopted GNC’s expanded assortment initiative, which drove a 4% improvement in comps in company-owned stores that received the assortment in 2015.

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