CNN reported that GNC, an 85-year-old vitamin- and dietary supplement manufacturer, has filed for bankruptcy and closed up to 25% of its stores. The retailer is in dire need of a buyer as it has almost $1 billion in debt. GNC has seen declining sales at brick-and-mortar stores since the outbreak of coronavirus. CNN reported that GNC has been unable to refinance any plans due to stay-at home orders in the last few months. This is a serious setback for the business. The pandemic caused 30 percent of GNC stores to close temporarily in Canada and the U.S.
GNC will still be in operation during bankruptcy filings, but it will be closing down. CNN reported that the company intends to close as many as 20 percent of its 5,800 retail locations, which could amount to as many at 1,200 locations in the U.S.
Total Retail’s Take This announcement places GNC on the growing list of retailers who have been permanently affected due to the coronavirus pandemic. Other retailers such as Tuesday Morning and Neiman Marcus have filed for bankruptcy in recent months. They also announced permanent store closings. Retail industry faces a difficult reality: more bankruptcies in 2020 and beyond are likely due to closing retail stores and slower consumer spending. GNC is a smaller company and will hopefully be able to rebound and adjust its strategy to better meet the needs of consumers in this new retail landscape.
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Microsoft will permanently close all retail stores
Microsoft announced Friday that it would permanently close all 83 of its store locations. Instead, the company will focus on its ecommerce business where customers can access support, sales and training. This decision follows the March closures of Microsoft stores due to the outbreak of the coronavirus. Microsoft stated that thousands of employees from these stores had already moved to new jobs, providing support, training and sales to customers remotely or at Microsoft corporate headquarters. Microsoft stated that it has seen significant growth in its digital stores, including Microsoft.com, Xbox and Windows stores, and that it will continue investing in digital innovation across hardware and software.
Total Retail’s View:Microsoft’s first brick-and mortar store was opened in 2009 where customers could try out its software and hardware. Apple, the main competitor, was experiencing great success with its clean, modern retail outlets. This was their decision. Microsoft has been expanding its retail presence over the past decade to offer a similar shopping experience to Apple. Although the outlets allowed users to test out its Surface models and play with Xbox games, there was less interest in them than Apple stores nearby. It’s therefore not surprising that Microsoft has decided to close its stores after the pandemic.
Microsoft deserves praise for smoothly transitioning its retail employees to other roles within the company. Microsoft was able to seamlessly transition its retail workers to new positions, unlike other retailers who had to lay off or furlough their employees. They now provide support, sales, training, and support to customers remotely or from Microsoft corporate facilities. How did it do this? David Porter, Microsoft Corporate Vice President, said that the company had “deliberately created teams with unique backgrounds to be able to serve customers from any location.” We were able to continue serving customers of all sizes, at any time they needed us the most, by evolving our workforce and working remotely over the last few months.
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