News Column

GNC abruptly replaces CEO

August 5, 2014

By Alex Nixon, The Pittsburgh Tribune-Review



Aug. 05--The chief executive of GNC Holdings Inc. was abruptly replaced on Tuesday, a week after the vitamin and supplement retailer posted disappointing earnings and blamed it on a poor sales strategy.

The Downtown-based company said it hired Michael Archbold, whose deep experience in retailing includes a stint as president of GNC competitor Vitamin Shoppe, to replace Joe Fortunato. Fortuado, 61, had been CEO at GNC for 9 years.

"The Board is committed to delivering improved financial results and creating value for GNC shareholders and we are pleased that Mike has agreed to join GNC," said lead independent board director, Michael Hines, who replaces Fortunato as chairman.

Archbold, 53, comes to GNC from women's apparel retailer Talbots Inc., where he was CEO. Prior to Talbots, he was president of Vitamin Shoppe Inc., and worked for Saks Fifth Avenue and AutoZone Inc.

The shake up comes a week after GNC reported a 4 percent decline in same-store sales for the April-June quarter, a lowered prediction for full-year profit and quarterly net income that missed analyst expectations.

Fortunato blamed the poor results on a heavy reliance on product discounts and a confusing pricing strategy. He announced a plan to wean customers off promotions and invest in marketing to draw shoppers back to stores.

Fortunato received total compensation last year of $2.9 million, which was down from 2012 compensation of $5.4 million.

His severance agreement requires GNC to pay him a lump sum of two times his base salary of $1 million, and two times his average annual bonus.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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(c)2014 The Pittsburgh Tribune-Review (Greensburg, Pa.)

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Source: Pittsburgh Tribune-Review (PA)


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