Vitamin Shoppe owner Franchise Group has filed for Chapter 11.
Franchise Group, the parent company of Vitamin Shoppe and other brands, has filed for Chapter 11 bankruptcy.
The company also owns brands such as Pet Supplies Plus and Buddy’s Home Furnishing. It has compiled an abundance of losses in recent months and has had troubles dogging backer B. Riley Financial Inc. It filed in Delaware and set out court documents nearing $2 billion in debt.
Franchise Group bought Vitamin Shoppe in 2019. In 2023, the company agreed to a $30 per share deal of approximately $2.6 billion to go private.
B. Riley Financial’s co-founder and Chairman Bryant Riley made a statement via email, according to Forbes:
“FGR’s bankruptcy is a confluence of events that ultimately detailed our original investment thesis. Unfortunately, the investment was devastated by the precipitous decline in consumer spending in the markets served by the FGR brands, and the fallout and uncertainty from the Prophecy scandal and the related federal investigation into Brian Kahn.”
Franchise Group CEO Brian Kahn stepped down in January during a criminal investigation into his role in a security fraud case linked to the collapse of Prophecy Asset Management.
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Vitamin Shoppe Parent Files For Chapter 11
The Vitamin Shoppe has over 700 locations with an online shop as well. The New Jersey-based company also has partnerships with Uber Eats to deliver online orders nationwide.
Franchise Group shared a statement on Sunday explaining that its lender group has agreed to give $250 million to aid in Chapter 11 financing. Franchise Group will shutter discount retailer American Freight and move forward with store closures this week during the restructuring period.
B. Riley shares have fallen following this news after announcing that it will need to take an impairment of $120 million on its equity investment. Despite the current news, Riley believes that the company will be fine moving forward.
“Despite the negative headlines, we are in far better shape than folks give us credit for.”
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