The Vitamin Shoppe Parent Company Files for Bankruptcy
The supplement and vitamin retailer launched Whole Health Rx, a telehealth service, earlier this year
The Vitamin Shoppe owner Franchise Group Inc. (FRG) has initiated Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
FRG went private last year through a $2.6 billion management buyout, arranged by investment firm B. Riley—which has been marred by challenges following an investigation into its founder and former CEO Brian Kahn over his alleged ties to the collapse of Prophecy Asset Management. Bryant Riley, B. Riley’s co-founder, shared with employees that he feels “personally sick” regarding FRG’s financial woes, according to a report by Bloomberg.
The group initiated the proceedings to implement a restructuring with holders of approximately 80% of its first lien debt to strengthen its capital structure and position its brands for sustainable growth. As part of the restructuring support agreement, the first lien lender group has committed $250 million in debtor-in-possession financing, which is subject to court approval and will go toward maintaining operations along with cash on hand.
Franchised locations of FRG’s brands are not part of the proceedings.
“Today’s announcement to de-lever our balance sheet is a pivotal step forward in enabling our market-leading businesses Pet Supplies Plus, The Vitamin Shoppe, and Buddy’s Home Furnishings, to realize their full potential,” FRG’s president and CEO Andrew Laurence said. “Each of these businesses has a demonstrated value proposition and provides great products and services to customers, which they will continue to do seamlessly during this process. Strengthening FRG’s balance sheet will allow us to enhance our support for these businesses as they advance their growth trajectories.”
Under the plan, FRG’s American Freight brand is closing its locations nationwide and online on November 5, but it will be business as usual for customers of its other three brands, including The Vitamin Shoppe.
The New Jersey-based supplement and vitamin retailer announced earlier this year that it was launching Whole Health Rx, a telehealth service connecting consumers with licensed healthcare providers for nutritional supplements and GLP-1 drugs such as Ozempic and Mounjaro, as well as compounded versions of weight loss medications. Last month, Whole Health RX added testosterone replacement therapy to its services.
