Vitamin World to file for Chapter 11 protection
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US retailer Vitamin World is to file for Chapter 11 bankruptcy protection hoping that will allow it to exit lease deals and trim its 345-strong store network.
The New York-headquartered retailer which sells vitamins and dietary supplements, says it inherited a lot of expensive leases from its previous owners and the rent burden is making it hard to trade effectively.
CEO Michael Madden said in a statement that entering Chapter 11 protection would allow the company to move forward as a stronger organisation, serving customers both in stores and online.
Madden assumed the CEO role last year and says he has been in negotiations with landlords ever since.
“While a handful of landlords cooperated, the vast majority have not. At this time we have no other option than to restructure the company’s real estate portfolio by filing for Chapter 11 protection.”
Last year, Vitamin World was sold by NBTY Inc, the maker of brands such as Nature’s Bounty and Sundown Naturals, to private equity investor Centre Lane Partners, for about US$25 million.
Questions & Answers
Q.What is the primary reason Vitamin World is filing for Chapter 11 bankruptcy protection?
What is the primary reason Vitamin World is filing for Chapter 11 bankruptcy protection?
The company states it inherited many expensive leases from previous owners, and this high rent burden is making effective trading difficult. Filing for Chapter 11 is intended to allow them to exit these lease deals.
Q.What steps did CEO Michael Madden take before deciding on Chapter 11 protection?
What steps did CEO Michael Madden take before deciding on Chapter 11 protection?
CEO Michael Madden has been negotiating with landlords since he assumed his role last year. He stated that while a few landlords cooperated, most did not, leaving Chapter 11 as the only remaining option.
Q.When did Centre Lane Partners acquire Vitamin World, and who was the previous owner?
When did Centre Lane Partners acquire Vitamin World, and who was the previous owner?
Private equity investor Centre Lane Partners acquired Vitamin World last year for approximately US$25 million. The company was previously sold by NBTY Inc, which manufactures brands such as Nature's Bounty and Sundown Naturals.
Q.What is the intended outcome for Vitamin World after entering Chapter 11 protection?
What is the intended outcome for Vitamin World after entering Chapter 11 protection?
CEO Michael Madden hopes that entering Chapter 11 protection will allow the company to restructure its real estate portfolio. The aim is to move forward as a stronger organisation, serving customers in both stores and online.
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