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Vitamin World Files For Bankruptcy

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Vitamin World, a retailer of vitamins and health supplements, filed for bankruptcy protection and said it has identified 51 stores for closure during the bankruptcy process.

The company filed for Chapter 11 reorganization in Delaware Bankruptcy Court on Tuesday. It has listed liabilities of more than $43.6 million and estimated assets in a range of $50 million to $100 million.

In the filing, the company said debtors experienced significant supply chain and ingredient availability issues. They also suffered by the struggling retail market, above market rents, and underperforming retail stores, it states.

The retailer's 334 stores, mostly operating in malls and outlet centers, employed nearly 1,500 people.

Vitamin World owes a total of $14.4 million in principal plus accrued interest on secured debt and about $9.5 million on a seller note that originated from it's 2016 buyout by private equity company Center Lane Partners. The retailer's inventory is valued at approximately $30 million.

Vitamin World said it will continue operating its stores, but is further evaluating the leases for additional underperforming stores and will attempt to renegotiate their rent.

"If those negotiations are unsuccessful, Debtors will be forced to reject those leases as well," Vitamin World's Chief Financial Officer Frank Conley said in a declaration filed with the bankruptcy court.

According to the court documents, Vitamin World has previously closed 45 underperforming stores and renegotiated some leases that resulted in savings of more than $2 million.

Vitamin World began in 1976 with a kiosk in Williamsville, New York. It was acquired by private equity firm Centre Lane in February 2016 for about $25 million from vitamin and dietary supplement company NBTY Inc., since renamed Nature's Bounty.

Vitamin World said it is currently heavily dependent on its loyalty program, "Savings Passport Club", for the success of its business. The loyalty program gives customers discounts and privileged access to special events, accounts for 96 percent of its sales.

by RTT Staff Writer

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