Vitamin World Inc. Expected to File for Bankruptcy Next Week
Vitamin World Inc. intends to file for Chapter 11 bankruptcy protection as soon as next week, according to Chief Executive Michael Madden. The vitamin and nutritional supplements chain operates 334 physical locations, started over 40 years ago by founder Arthur Rudolph. Madden said the retailer has been unable to strike a deal with its landlords to renegotiate leases, stating that,
For the past 18 months, we have tried to work with the landlords to restructure problematic lease agreements that were negotiated by the previous ownership …while a handful of landlords cooperated, the vast majorities 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.
Madden joined the company as a turnaround expert, and has been working on solving the issues with the company’s real estate portfolio since he became CEO in 2016.
This places Vitamin World along with other major players in the retail sphere that have lost foot traffic to their physical locations due to online retail competitors. Brick-and-mortar retailers are increasingly becoming obsolete as online stores allow consumers to compare and purchase products with ease. “Shares of Vitamin World’s larger competitors, GNC Holdings Inc. and Vitamin Shoppe Inc., have both fallen by more than 60 percent over the past 12 months.”
In a comforting note, Madden looks at a bright future after bankruptcy stating, “This action will empower us to move forward as a stronger organization that can and will continue to service our millions of loyal customers with premium offerings via retail and online channels.”
Chapter 11 allows companies to reorganize their operations without major penalties, including renegotiating debts with lenders. This would allow Vitamin World Inc. to break long-term leases under protection of law.
A Vitamin World spokesman confirmed that the company is working with RCS Real Estate Advisors to negotiate with landlords on leases. Vitamin World has hired law firm Katten Muchin Rosenman LLP for the bankruptcy filing.
Cristina Lipan is a bankruptcy attorney and partner with the law firm of Shipkevich PLLC. Cristina is admitted in the Southern and Eastern Districts of New York and regularly practices before the United States Bankruptcy Court. For more information on this matter, you can reach Cristina at 646-867-0098 or at email@example.com
-  Biswas, Soma, Vitamin World Plans to File for Bankruptcy, CEO says, The Wall Street Journal Sep. 5, 2017, available at www.wsj.com/articles/vitamin-world-plans-to-file-for-bankruptcy-ceo-says-1504648244.
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-  DiNapoli, Jessica, Vitamin World Says it Will File for Bankruptcy Protection, Reuters Sep. 5, 2017, available at https://www.reuters.com/article/us-vitaminworld-bankruptcy/vitamin-world-says-it-will-file-for-bankruptcy-protection-idUSKCN1BG2RT.
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